Who's Cleaning Up in Bath Rugs?
Cecile Corral -- Home Accents Today, September 20, 2004
Since Pillowtex began liquidating last summer, much attention has been centered on the impact it would have on the bath towel market.
But over the past year, the company's departure has also set off an almost equally frenzied scramble for shelf space in the bath rug department.
While Pillowtex was not the largest bath rug supplier — having reported in 2002 roughly $47 million in sales, which represented its smallest business and set it at fourth place among the then-top five players — the company was admittedly the gatekeeper to several well-known brands that provided it enviable positioning at several key retailers.
Now that all the Pillowtex inventory has worked its way out of stores, the clock is ticking on opportunities to grab that business.
Scottsboro, Ala.-based Maples Industries is one of the first to take a piece of that pie.
After several weeks of spirited bidding against at least one other major competitor, Maples earlier this month became the bath rug licensee for Royal Velvet — a former Pillowtex brand that was bought by Official Pillowtex LLC last October, with the brand managers being Group 3. It is the latest addition in a license portfolio for Maples that includes Martex and Grand Patrician, both WestPoint Stevens brands.
“We believe that we can expand our business with strong brands and quality product,” Wade Maples, president of Maples Ind., said. “Royal Velvet, with its great name recognition and quality reputation, is a perfect fit.”
Others stood to gain in bath over the last months at Pillowtex's expense. The company's exit freed up enough business to plump sales at Springs and Mohawk, while also freeing up the No. 5 slot on HTT's Annual Top Five listing this year for Lacey Mills, which generated $24 million.
But at a time when the branding proposition is in question across the industry, compounded with the absence of new Royal Velvet product from store shelves for several months now, many suppliers see a chance to step in and offer their own product and portfolio of brands as potential alternatives to Pillowtex's.
“There are a couple of things going on that not everyone has looked at,” Jeff Meadows, division vice president of Dalton, Ga.-based Shaw Living, said. “Some of these brands (like Royal Velvet) were great, but they are brands of the past. Five years ago, you only had 18 percent of the female demographic that everyone is after shopping at mass merchants every week. Last year, these stores had over 70 percent of them shopping there. And these brands mean nothing to that consumer.”
For this reason, Shaw Rugs changed its name to Shaw Living last year, he continued, “because it's the brand we want to promote.”
With a considerable market share of the rug and carpet industry, Shaw Living hopes its current customers and new ones will recognize the Shaw name, connect it to the company's reputation in floor coverings and consider that reason enough to buy its other product lines, like bath rugs.
“You've got new consumers shopping at places they never shopped before,” Meadows explained. “So that consumer is open to new brands. And if they've purchased Shaw carpet in the past and had good experiences with it, it makes sense for them to them and they'll buy our other products.”
Recently, Shaw Living — the No. 4 bath rug supplier with $30 million in sales — increased its staff to beef up placement for its relatively new line of bath rugs. Earlier this month, the company hired two Burlington Rug Corp. alumni — John McLeod and Dennis Fein — to help promote its bath rugs, scatter rugs and top-of-bed goods.
Shaw first entered that category last year through its acquisition of Georgia Tufters.
Mohawk Home, based in Sugar Valley, Ga., the country's top rug supplier with $172 million in sales, earlier this year began building the breadth of its bath rug offerings with new designs and textures through enhanced efforts importing. Taking similar measures to Shaw, the company in February created a new post — design director for imported bath rugs — and appointed industry veteran Donna Sandy to fill it.
Lacey Mills, based in Cartersville, Ga., has looked to licensing to gain new placements and build retailer relationships.
“Branding, over the last couple of years, has become extremely important for us,” said Tom Etheridge, co-owner of Lacey Mills.
Lacey is the licensee for Polo and Dockers Home for bath rugs.
“We've doubled our Polo business over the past four years, and now we're excited to be working with Dockers,” Etheridge continued. “So we've really seen the value of having these brands.”
Etheridge acknowledged that the Royal Velvet and Fieldcrest brands “still carry a lot of validity with customers, especially those in their 30s, 40s and 50s.”
But he added that retailers are placing more emphasis on a broad range of brands for the product category, opening doors to other names and styles — and essentially other vendors like his company.
For this reason, Lacey is exploring new opportunities with another department- and specialty-store-level license brand for bath rugs, he said.
Giving the established suppliers something to think about are various newcomers to the category.
828 International Trading Co., traditionally an area rug supplier, this year — through new overseas sourcing partnerships — was able to expand into freestanding bath and accent rugs for the first time.
“We found that there is considerable opportunity in this area (bath rugs), especially since 828 has expanded its product distribution to some of the national domestics departments,” said John Shepherd, CEO.
In October, the company will expand its bath rug offerings to meet these needs.
Sphinx/OWA in April will expand its offerings from solely area and accent rugs to bath rugs, throws, decorative pillows and top-of-bed goods in order to become “a single source to retailers,” said Mike Riley, executive vice president at Sphinx.
After conducting some of its own market research, Capel Rugs, based in Troy, N.C., discovered “an opportunity to add bath rugs to our offerings. We know we have a great brand name, and with those larger retailers looking for product, we thought we could help with some style and design,” said Allen Robertson, sales manager.
At the fall New York Home Textiles Market, Capel is introducing its Silkie bath rug, made using a poly-olefin fiber system with a patent-pending SofTouch technique. At $24.95 for a 17-by-24, Silkie targets specialty and department stores.
The company is also launching its bath rug program with three “good, better, best” offerings from India to reach out to new customers in broader levels of retail.