In the bath business, consumers win at the expense of industry margins
25 March, 2023
After a tough 2022, bath category suppliers continue to grapple with a retail landscape in flux.
“The consumer has been gradually getting more for their money, and that is partly a function of the commodification of towels,” explained Charles Gaenslen, CEO of Loftex Home. “Quality has progressively improved over the years without retail pricing going up, too.”
In some ways, it’s never been a better time to be a bath towel shopper. Product quality and innovation have improved dramatically, but you wouldn’t necessarily know it from looking at some of today’s retail price points. The opposite is also true. Continued cost increases for raw materials and logistics are prompting some retailers to slap higher tickets on existing programs.
1888 Mills argues these macro hurdles have pushed retails of towels into an uncomfortable corner.
“2022 was tough because everyone raised their retails to offset inflationary pressures, and net sales dropped a lot across the board in the bath categories, making it hard for retailers to drive growth,” said Fulton Allen, president.
The problem continues to persist, he warned. “Maybe we’ll start to see some deflationary pressures soon. But at this point, no one wants to move retails back down yet,” he said. “We can assume [price points] will stay where they are now, for the most part, with more aggressive retails in the second half of this year.”
To avert some of the impacts, the company is creating products with a heavy dose of what it calls “Wow! factors,” added Lexi Schladenhauffen, chief experience officer. “When we add value, the consumer responds,” she said. “We’re always looking for ways to add that extra piece to our product to enhance the customer experience, whether it be promoting social causes or adding a new brand or brand expansion into our categories. We have a lot going on always in our innovation pipeline, and a big part of that involves sustainability.”
The same goes for Loftex, which has strategically put sustainability at the center of its product development for every product the company has added to its line since 2018.
“In fact, our innovation has been focused almost exclusively on sustainable products, materials and processes since 2016,” Gaenslen said. “We are single-minded on finding innovations and products that further sustainability, with the ultimate goal of product involved in a constant recycling loop.”
Inflated raw material costs for have also hurt the bath rug segment. But so, too, have higher labor expenses for major category players and U.S. manufacturers Mohawk Home and Maples Rugs.
To that end, Maples Rugs is rethinking its focus toward the company’s advantages in the marketplace: its domestic production of tufted and printed accent/area rugs.
“Our rug printing operation has the greatest capacity and capability in the industry,” noted John Maples, president.
Mohawk Home is reorganizing its bath rug operations to make more room for imports.
“Our bath rug business was still down in 2022 on the backside of Covid, and the market continues to evolve today. There are still question marks at retail with some of the major players,” observed Bart Hill, senior VP. “What’s happening is a consolidation of the business, not only with retailers going out of business but also with the current retailers reducing shelf space for the product.”
To vie for shrinking placements at retail, Mohawk Home is diversifying its assortment with new constructions and a wider range of fibers, including cotton, polyester, nylon, micro-poly, memory foam and more.
“It’s not just the solid-colored, cut pile rugs we’ve offered forever,” Hill said. “We’re expanding with more pattern and color combinations, more foam options, micro-poly options, tabletop options. And we’re optimistic – because bath rugs are a necessity.”
Compared to the tumult felt in 2022 by towels and bath rugs, the bath accessories side of the equation has been better off, major category suppliers agree.
“Overall, 2022 was not a good year for bath,” said Jeff Kaufman, president and chief operating officer of Avanti Linens. “But for us, our free-standing shower curtains grew as a category relative to other businesses.”
The same was true for Town & Country Living, which reported positive results for its bath sales in 2022.
“We did have a tough year last year, like everyone else. But in bath, we were up and continue to be,” said Judi Alvarez, VP of licensing and marketing.
She credits gains in shower curtains, particularly printed and embellished woven styles and licensed and premium branded collections; bath towels in jacquard woven constructions; and bath rugs and mats, specifically microfiber and nubby-textured varieties as well as two-pack sets.
Town & Country Living is expanding its shower rod and hooks assortment with elevated looks and styles and is adding the bath accessories category to its mix for the first time. The launch set for fall 2023. “Bath has proven to be a strong business for us,” Alvarez said. “It’s a category of growth for us and one that makes sense for Town & Country, given our many divisions that complement our bath business.”
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Source: www.hometextilestoday.com