Soft goods vendors bolstered by branching out

Soft goods manufacturers aren’t letting current economic challenges dampen their operations; instead, they are reaching out to new customers and adding complementary products to their lines to offer a one-service shop for retailers.

Manufacturer Sharon M. Turner, president of Bella Rose by Chateau in Oklahoma City, summed up the market wryly: “Soft goods are a bit soft.”

Home Accents Today ’s 2006 Universe Study projected 2007 sales for soft goods — a broad category of decorative pillows, top of bed, throws and quilts — to be about $3.6 billion, and sales growth for the category to be a modest 2.4%. In 2006, discount department stores/off-price retailers were estimated to remain the consumer’s favored source for buying soft goods ($1.26 billion in sales), followed by home accent/gift stores ($635 million) and lifestyle stores ($475 million).

Distribution channels estimated to grow the fastest in 2006, according to the study, were direct-to-consumer sales (up 7% to $460 million) and sales to interior designers (up 4.2% to $99 million).

Turner said she attributes her assessment of sales to several factors: a significant decline in new home building; more mid-price furniture companies offering private label textile lines; and large retailers experimenting with direct imports.

“A number of manufacturers have begun importing at a more rapid pace than many Asian factories have projected or planned for within their production infrastructure and qualified staffing. Therefore, this has created stress in accommodating new production demands,” she said.

Using domestic suppliers is also creating stresses. Kyle Tager, co-owner of Mystic Valley Traders in Woburn, Mass., noted that more U.S. fabric companies are going the way of Quaker Fabric, which filed for Chapter 11 bankruptcy protection in August.

“The pool of available resources is shrinking. The tidal wave of inexpensive imports is always a challenge,” said Nancy Reib, principal of Wildcat Territory in New York.

“Every year, we see one or two of our sources go out of business,” said Judith Rose, vice president of Textillery Weavers in Bloomington, Ind. “We try to have all of our yarns spun in the U.S.; it’s happening more and more that we can’t get them in the U.S. anymore.”

To counter these pressures, manufacturers are cultivating new customers. “When business is tight, you say, 'What segment are we missing?” said Kate McLaughlin, director of merchandise and marketing for Saro Trading Co. in Burbank, Calif. For Saro, maker of tabletop, top-of-bed and pillows, it’s the high-end retailer. “We’re moving into more upscale stores,” she said, adding that it’s a small but key focus that helps Saro balance costs and work well with its “core customers, the moderate specialty stores. They’re the ones that put our business on the map.”

Bella Rose’s Turner said, “We are redirecting our efforts to put a larger emphasis on very high-end product, as this area is being least affected by the current economic situation.”

Textillery Weavers, which specializes in throws, is finding its largest orders these days come from the hospitality industry, Rose said, adding that hotels place reorders every three to six years. “We get a lot of retail orders from people staying in the properties,” she added. The company is also working with private plane manufacturers and hopes to branch out into outfitting yachts with its high performance indoor/outdoor throws.

Tager said Mystic Valley Traders’ execs noticed the price of the bed itself dropping, though the bedding was not keeping pace. “We’ve had to introduce much more competitive pricing for the retailer,” he said, noting the Bed Decor dealer program, which allows retailers to purchase from a selection of the company’s collections at lower price points, thus offering economies of scale.

“The consumer is also driven in a retail environment in top of bed by immediate gratification,” he said.

Some manufacturers are branching out with complementary products, such as upholstered headboards and draperies — items for which manufacturers often sell fabric to clients. Kristin Kopp, spokeswoman for Eastern Accents in Chicago, said the drapery business is among the company’s largest growth areas.

Tager said his company’s introductions in these areas have helped create a more seamless shopping experience for customers. “It’s an opportunity to offer current customers more services and products – an 'ease of doing business’ with Mystic Valley Traders,” he said.

These areas are a focus at Bella Rose by Chateau, too. “New lines and product expansions for us (in the coming year) will include expansion of our new headboard category, curtain panels in luxury fabrics, trim offerings and larger scale occasional ottomans,” Turner said.

McLaughlin said Saro Trading customers like “being able to buy most of their goods from one company. When we buy or develop new product, we think of cross-merchandising, in both our showrooms and our catalog,” she said.

In soft goods, the dollars are in the details, both in investment and sales. Balancing the two is key, said Reib, whose company is known for dressmaker details such as pleating, hand embroidery, banding and binding. “You need to be generous to your customers,” she said. “To me, that’s giving very generous details at a very reasonable price.”

The Internet is creating a significant impact on soft goods, from sales to trends to new product introductions. Saro Trading uses e-mail campaigns and the company site to attract customers, while a new Web site at Mystic Valley Traders is expected to be up before the end of the year.

Rose said the Internet is helping to reshape trends as we know them. “There used to be a time when there was a trend and you could not find every color available,” she said. “Now, everything is available. We don’t see a driving trend like we used to.”

She pointed to the High Point Market as an example. While black, white and red were popular, neutral colors and even bright pink were making a statement. “People are used to getting exactly what they want,” she said, adding that you can go into a showroom or store and see a dozen products from a manufacturer — or go online and see 100.

“The boundaries and definitions have really changed; the economy of markets has changed,” Reib said. New products could be available online before markets, she pointed out, and core customers might feel like they do not need to see them in person. The possibilities don’t stop there. “I don’t need to be tied in to introducing new products two times a year,” Reib said. “I can do it when I want to. That is huge. I think in some ways it’s really great. It makes me feel a lot more creative.”

Kyle Tager

Sharon M. Turner