By Allison Zisko
Flat business in 2007 has forced the bath textiles industry to consider new ways of doing business.
The overall bath category—which includes bath towels, shower curtains, bath accessories and washable rugs—held steady at roughly $3.9 billion last year, according to HFN estimates, although some segments showed decline. The market shares of the retail channels remained stable.
The sluggishness of the market did not surprise vendors, who have been grappling with rising material and energy costs and increased competition from overseas, as well as from their own customers, many of whom have chosen to source directly. Then there’s the preoccupied consumer, who is less inclined to shop for new towels or toothbrush holders as the cost of living continues to accelerate.
Retail bath departments are looking sparse these days, according to Rick Lipton, director of the bath coordinates division at Baltic Linen Co. “You can see less of a concentration in the area,” he said.
On the manufacturing side, opportunity lies in unique construction and materials. The green movement has spurred the development of many eco-friendly bath towels and accessories, but is difficult to gauge the salability of these products while they are still in their infancy. The choice of raw materials also presents conundrums. For example, in bath accessories, as petrochemical costs escalated, resin use went down and ceramic production increased. But manufacturing ceramics is energy-intensive, making it a less viable option right now. Value-added products, such as reversible shower curtains, are increasingly desirable.
New retail opportunities must be hunted down, according to vendors. “You constantly have to reinvent yourself [in terms of] who you’re selling to,” said Rae Blum, vice president and national sales manager for Cobra.
“You have to search every nook and cranny,” said Bob Weiss, director of sales and marketing for Creative Bath, who promised to call on any retailer with the “slight ability to buy a shower curtain.”
Creative Bath has turned to exporting as more of its customers begin to source product directly. The company ships to eastern Europe, Saudi Arabia and Australia, among other spots. At the same time, it finds some American retailers are more interested in its domestically made products.
Sales of bath accessories totaled roughly $313 million in 2007. Mass merchants and warehouse clubs account for more than half of all sales in this category, followed by specialty stores.
Freestanding accessories that do not directly coordinate with shower curtains or rugs have become more popular. They give retailers more merchandising options and consumers the opportunity to change the look of their bath without investing a lot of money.
The category faced many obstacles last year. “There are probably more challenges today than ever before,” one vendor said. “The skyrocketing costs of raw materials, adjustment of the RMB (the renminbi, China’s currency), rising labor costs, not to mention extra freight costs, have made this the most challenging time in many, many years. Retailers cannot accept price increases and are expecting more bells and whistles and a higher service level than ever before.”
The bath towel business remained flat in 2007 at approximately $2.2 billion. Business was hampered by an oversaturation of solid colors, little differentiation on the retail sales floor and the constant promotion of sets, which increased revenue but hurt both retailers’ and manufacturers’ margins.
“What’s wrong with the towel business is that it has become a commodity business,” said Gretchen Dale, chief operating officer of Loftex. “It’s all about pound and ‘how much does it cost?’ ”
Fashion and innovation will strengthen the category, vendors said. Jacquards have made a bit of a comeback and give consumers an alternative to a sea of solid color, Lipton said. Mixing summer brights with stripes has also been successful.
Espalma has always been known for its jacquards, according to Blum. “It’s very hard to compete in the solid world,” she said.
New constructions and techniques will also give this category a lift. The performance category—towels that dry quickly or retain their color for a longer period of time, for example—shows a lot of promise, Dale said.
Zero-twist and ring-tossed constructions were popular for a time, but their longer drying time made them less appealing to consumers. Manufacturers are quickly coming up with alternatives, such as lighter-weight towels with long thin loops that are more absorbent and dry quickly.
More premium yarns, such as Egyptian, pima and supima, are being promoted at aggressive prices, according to Bob Hamilton, chief marketing officer at Welspun.
Then there’s the green movement. The success of organic towels, bamboo constructions or towels made from recycled goods remains to be seen. Blum noted that any new concept serves to wake people up. “We need the industry to always come up with the new buzzword,” she said.
According to Hamilton, there were more organic offerings on the market, but results were mixed. “Early iterations of organic yarn do not impart softness, and the consumer must have soft,” he said. “As that improves, better organic products will emerge. We believe that organic will become an ingredient just as pima and Egyptian are ingredients. The Organic Exchange (a charitable organization committed to expanding organic agriculture) will also take organic offerings to lower price ranges.”
When it comes to towels, however, it’s all about touch. “Hand is still the most overriding criteria in towels,” Lipton said. “I’m still convinced the customer buys a towel based on how it feels.”
Shower curtain sales dropped slightly last year, to approximately $487 million. Like bath accessories, most shower curtains are sold in the mass and warehouse club channel. Specialty stores account for about a quarter of total sales.
The shower curtain business has gotten more challenging because newer homes and redecorated bathrooms tend to have glass shower doors or spa baths. Shower curtains don’t fit in those environments. They seem to have gone the way of ties and hats, Blum said.
Nonetheless, there are more choices and nicer options in shower curtains, according to vendors, and like bath accessories, retailers are choosing them more for their ability to coordinate with a variety of looks in the bath, rather than as a coordinated program.
According to Weiss, retailers have reduced the “magic price point” for shower curtains to $24.99, and it’s difficult to offer good design and colors and quality at that price level. “The consumer is only willing to spend a certain amount of money,” he said. “The bar has been lowered.”
Sales of washable rugs increased slightly last year, to roughly $837 million. Department stores, mass merchants and flooring stores all lost a small amount of share, while home improvement centers and catalogs made slight gains in this category.