Wal-Mart widens gap in textiles

Carole Sloan, July 22, 2002

It wasn't even close last year.

Wal-Mart moved into a decisive lead for first place in home textiles sales, besting JCPenney by nearly a quarter-billion dollars.

The world's largest retailer benefitted from the addition of 101 new stores in the Wal-Mart division that helped push home textiles sales up 8 percent to $2.580 billion. At the same time, the Bentonville, AR-based discounter saw its softlines/domestics share of total store sales drop yet another percentage point to 18 percent, following similar single percentage declines in the three prior years.

Penney's home textiles sales rebounded in its department stores with an 8 percent increase over 2000. Catalog sales, however, while stronger than the total catalog with an 8.6 percent decline in home textiles vs. the total catalog, which dropped 19.7 percent. Overall, Penney's home textiles business was $2.335 billion, down 0.3 percent for the year.

In fact, home had the largest sales increases at Penney, with bed and bath the second strongest performer, following the newly expanded housewares business.

In addition, the Plano, TX-based retailer closed 36 stores in '01, the third year in a row that store count declined.

The Top 5 in Home Textiles Today's exclusive annual Retailing Giants Top 50 survey were the same as in 2000, with Target moving up to third place, switching slots with Kmart, now in fourth place and operating under Chapter 11 bankruptcy protection. Target continued its aggressive store openings with 76 new units, and a revved up SuperTarget opening program.

Ranking fifth was Bed Bath & Beyond, which continued its strong growth, with home textiles sales increasing 20 percent to $1.581 billion. The Union, NJ, specialty chain increased its store count by 85 topping its 2000 store openings by 15 units.

Linens 'n Things joined the exclusive "Billion Dollar Club" of home textiles retailers with home textiles sales of $1.004 billion for 2001, bringing that elite group's membership to six.

Home textiles sales in 2001 fell 3.2 percent to $21.3 billion, in part due to the recession, the aftermath of Sept. 11 and the increased volume of imports, which created significant price point shifts.

The Top 50 significantly increased its share of the total home textiles market with sales of $19.386 billion, up 4.2 percent, or 91 percent of the total, compared with 85 percent in 2000.

The Top 5 accounted for $10.252 billion of total home textiles sales, up 6.3 percent over 2000, and 48 percent of the total, up from 44 percent in '00. The group's share of the Top 50 increased to 53 percent from the 52 percent share in '00.

The rankings lost three players: HomePlace of America, formerly No. 13; Montgomery Ward, formerly No. 17; and Bradlees, formerly No. 22, all now out of business.

Replacing them are Lowe's, at No. 38; HomeGoods, at No. 42; and Anna's Linens, at No. 44.

For the Top 10, sales were $13.476 billion, up 6.3 percent, or 63 percent of the total home textiles business vs. 58 percent in '00 and 70 percent of the Top 5, compared with 68 percent in '00.

The players were the same, and only Kohl's and T.J. Maxx/ Marshalls moved ranks, switching places in the No. 8 and No. 9 slots, in addition to Target and Kmart.

Macy's East moved into the ranks of the Top 15, to No. 15, up from No. 19 in '00. Of the others, Family Dollar, Big Lots and Luxury Linens each moved up three slots, while Ames, operating under Chapter 11 bankruptcy protection, dropped three slots to No. 14.

The Top 15 had a 5.8 percent increase to $14.809 billion, or 70 percent of the universe, compared with 64 percent in '00 and 76 percent of the Top 50 vs. 75 percent in '00.

The Top 25 recorded gains of 4.7 percent or $16.605 billion, accounting for 78 percent of the market vs. 72 percent for '00 and 86 percent of the Top 50, up from 85 percent in '00.

Overall, nine retailers had double-digit sales gains, with Anna's Linens registering the largest at 37.5 percent.

Despite the tough year, only four of the Top 50 players had double-digit declines: Ames, Fingerhut, Spiegel and Strouds.

Looking back to 2000, Joe Laneve, senior vp, Bloomingdale's New York, observed, "Business got soft in the second quarter, then Sept. 11 — 59th Street is such a big part of the business. And also we have four stores that are big tourist stores, and these were affected.

"But we're coming back slowly. It's less bad each month. And our big brands have been revitalized."

For Penney, last year marked a big change in focus, buying and implementation. "We were narrow and focused on being in stock on key items. There also was strong store implementation of basic business shops — pillows, down, towels, bath rugs," Steve Jebbia, vp, gmm, said.

From a fashion perspective, quilts were clearly the stars. "And not just at opening price points, but at all price levels," he added. And the company marketing effort helped overall.

"Last year was difficult in the textiles business," said Steve Silverstein, president of Linens 'n Things. Despite this, he said, "We were pleased with our Nautica launch. Quilts and duvets were strong contributors, and we repositioned our core solids to focus on quality and value."

At this point, Silverstein noted, "We're starting to see an encouraging trend, but there's a long way to go."

Rob Valone, president of Strouds, which revamped its business and store count under new ownership, said, "We've successfully returned the company to profitability. And we've regained and rebuilt the confidence in the format with the vendor community.

"The rebranding of the company — taking the merchandise assortments up and changing the marketing away from price promotions to product marketing has paid off."

For Direct Marketing Services, "home textile business has been tough," said David Milgrom, president. "Last year, overall, was up about 10 percent; home textiles were up a couple of points. We're developing some special values for textiles."

Top multidivision operations

Corp. Rank Corporation Home Textiles Sales ($millions) Percent Change Share of Home Textiles Retail Sales Number of Stores
1. Includes No. 1 Wal-Mart and No. 36 Sam's Club.
2. Includes No. 3 Target, No. 10 Mervyn's and No. 33 Marshall Field's.
3. Includes No. 15 Macy's East, No. 16 Fingerhut, No. 18 Macy's West, No. 30 Bloomingdale's, No. 41 Rich's Lazarus Goldsmith's and No. 46 Burdines, plus The Bon Marche which does not rank on the Top 50.
4. Includes No. 9 T.J. Maxx/Marshalls and No. 42 HomeGoods.
5. Includes No. 37 Hecht's, No. 43 Foley's, No. 45 Robinsons-May, and No. 50 Filene's, plus Kaufmann's, Famous-Barr and Meier & Frank which do not rank on the Top 50.
6. Includes No. 17 Spiegel and No. 20 Eddie Bauer. Does not include Newport News, which also includes home textiles in its product mix. Store count is for Eddie Bauer stores only.
7. Includes No. 27 Domestications and No. 28 The Company Store.
8. Includes No. 35 ShopKo plus Pamida, which did not rank on the Top 50.
NS=No Stores
2001 2000 2001 2000
1 Wal-Mart Corp.1 Bentonville, AR $2,698.0 $2,496.0 8.1% 12.7% 3,244 3,118
2 Target Corp.2 Minneapolis $2,449.0 $2,296.0 6.7% 11.5% 1,381 1,307
3 Federated3 Cincinnati $1,064.3 $1,173.0 -9.3% 5.0% 458 385
4 TJX Companies4 Framingham, MA $588.0 $552.0 6.5% 2.8% 1,340 1,241
5 May Dept. Stores5 St. Louis $504.0 $510.0 -1.2% 2.4% 355 345
6 Spiegel Group6 Downers Grove, IL $388.0 $403.0 -3.7% 1.8% 536 523
7 Hanover Direct7 Edgewater, NJ $299.0 $295.0 1.4% 1.4% NS NS
8 ShopKo Stores8 Green Bay, WI $176.8 $182.0 -2.9% 0.8% 366 393

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