Spotlight hits housewares; casual explodes in lieu of lawn, garden lines

Spotlight hits housewares CHICAGO–With the growing midsummer International Power Equipment Show in Louisville stealing away many makers of big-ticket lawn and garden products, housewares exhibitors enjoyed a more prominent position among the 75,000 visitors to the National Hardware Show here.

There was an explosion of casual furniture, most of it for patios, while energy savings and security products made their mark. Vendors of electronic set-back thermostats and infrared floodlights reported strong interest as prices continue to decline.

Amid reports of healthy sell-through this year, retailers also demonstrated rising interest in barbecue grills, ceiling fans and fan-heaters.

On the home security front, First Alert believes its two Halon fire extinguishers unveiled at the show will help boost retail sales by 40 percent in the next five years.

A major housewares introduction at the show was Tucker Housewares’ new line of under-the-cabinet plastic storage products. Available initially in almond-hue and four-color packaging, the line includes such items as bread boxes and drawers with inserts.

An impressive 10-SKU line of gas grills from Nordic Ware and a first-ever collection of casual furniture from Rubbermaid headed the list of buyer favorites at the show. The Nordic products are self-cleaning and will feature mahogany side shelves. “It’s product that clearly puts Nordic a step ahead,” asserted William Marcil of Nordic. Rubbermaid’s collection, meantime, is named Sundial, and its tough-polypropylene material is advertised as being virtually maintenance-free.

 

“Rubbermaid’s white resin furniture is very impressive,” said Ed Lanctot, vice president and general merchandise manager at Cotter & Co., the nation’s biggest hardware cooperative. “We also think Nordic Ware has made a fine looking barbecue grill.”

Another influential buyer, Donald Bratt of K mart Corp., echoed Lanctot’s views on the Nordic line, though the big mass merchant will limit all gas placement to models under $200 in price. “In gas models we’re making an effort to step up our customers from $97 single-burner products,” Bratt said. “By promoting effective good volume in the $149 to $169 range.”

Like other shoppers at the show, however, he admitted the proliferation of home centers and big hardware warehouse chains–including K mart’s own Builder’s Square-have had an impact on some categories of home goods. “Grill sales have been rather flat for us the last couple of years,” said Tom Heying, another K mart buyer. “We’re not getting the yearly gains in gas grills that we enjoyed at one time. The increasing competition has been a factor in that.”

The new McCormick Place annex wasn’t open in time for the hardware show, leaving many exhibitors with smaller booths than they’d planned. But attendance was healthy, and organizers allowed main floor vendors to open on Sunday, a day reserved in the past for McCormick West exhibitors only.

“If the annex had been ready we were due for a booth 40 percent bigger than what we have,” said Marshall Bedol, president of Marshallan Industries, the Cleveland-based producer of grills. “But traffic has been very good for us in the main building and all the right buyers are here, so we have to be happy.”

At McCormick West, though, the mood was markedly different. “This show’s been a disappointment for us,” said Cort Clark, president of Los Angeles-based Keroheat, the importer of heaters. “It used to be that we had our own one-day show on Sunday, but that was taken away from us and traffic has been poor.”

In programmable thermostats, Honeywell was in the spotlight at the show. The company has hired a new management team for its retail division, headed by Dennis Gambiana, and said that it will continue to market the three-SKU Quad Six line it acquired last December under Quad Six’s old Magic Stat brand name. On the Honeywell side, a new mechanical model, the CT-150, was introduced at a $69 price point, pre-empting to some extent the old CT-200 at $89.

Jameson Home Products will offer $5 rebates on its two new electronic models under the Ener-Genius label this fall. Prices will be $69 and $89–low enough to persuade many consumers to step up from mechanical units, it was said. Jameson calculates about a half million electronic units were sold in the U.S. last season, not far behind the 600,000 total for mechanical at retail.

“The price spread between the two is closing, and in time there won’t be any reason to buy electromechanical,” said Robert Bukowsky, vice president of sales and marketing at Jameson.

The category leader may well be Hunter, which weighed in at the show with a new generation of electronic units called Energy Monitor II. So far, there are just two SKUs, at $49 and $59, down about $10 from previous electronic editions.

There is, moreover, a new line of mechanicals ranging from $12 to $19 at retail. Shipment will commence in September.

Another hot new category at the show was security lights. It is coming of age as prices settle below $100 after being as high as $300 several years ago when passive infrared technology was new. Tahoe Products has four new models that detect heat and/or the motion of a person within 75 feet and turn on automatically. Prices range from $79 to $99 at retail.

James Wimsatt, president of Tahoe, forecasts sales of 500,000 security lights at retail in the coming year. “They’re perfect for home improvement centers and the hardware co ops, and Sears and Wards are good candidates,” he says.

Rather than infrared, Timely Products had developed security light incorporating the same Doppler radar system that airliners use to detect wind shear. Timely contends the units achieve wider coverage, though that comes at a premium: prices range from $139 to $159.

Hot, wet weather over much of the country this summer contributed to a banner bug killer season, with over 1.6 million units shipped to retailers. Merchants report virtually no carry-over inventory, which should be good news for the profit-pressed survivors in the category. There were once 30 bug killer producers, but a shake out over the past two years has left four or five major companies to split up the business.

Flowtron remains a strong No. 1, supplying all of Sears’ product (accounting for almost one-third of the market) and controlling, overall, more than 50 percent of sales. Stinger has roughly 25 percent, according to sources, while Klenatron and Sunbeam each counts on some 10 percent.

Even Flowtron hasn’t been immune from the pricing battles that have plagued the industry. The company will discontinue its original line of metal units in 1987. They will be supplanted by lower-cost plastic models which retail at $29.95.

Stinger has downsized its 40-watt unit and the price is expected to come as low as $29 next season on promotion, not far above the everyday price of its 15-watt model. Stephen Sadler, a Stinger executive said, “Margin pressure is still intense–bug killers only sell on promotion–yet I think pricing has bottomed out at this point.”

In other product areas, Robertshaw introduced a line of range-top knobs in white, black and chrome colors. Mostly a replacement business, oven knobs have been dominated by commercial suppliers until now, but Robertshaw is confident it can interest retailers in the category.

Caframo Ltd. unveiled its Executive, a combination humidifier and air cleaner. With a list price of $129, the 4-gallon unit is billed as quieter than ultrasonic with an enclosed motor that is resistant to calcium build up and white dust emissions.

Friberg of Motif: motivating coordination

NEW YORK — Karl Friberg strolled through the Ralph Lauren showroom in the J.P. Stevens tower here like a proud host showing a guest his manor.

The fabrics and wallcoverings that his company, Motif Designs, produces for the Lauren home furnishings program have been a surprising success after an initial reluctance by some department stores to carry the products.

At first, according to Friberg, department stores participating in the Lauren program had reservations about taking the wallpapers and fabrics, while licensees for other collection elements were “fighting the buyers off.”

He added, “Every store in the country wanted to order $10 million in sheets and we were out there pleading for a buyer. We had to teach the whole store from the president on down about our products.”

Seventy-five percent of the Lauren home shops now carry the Motif fabrics and wallcoverings, as department store managers realize the items offer an important link to other products in the Lauren Lifestyles collections. A key sales link

“A Denver store sold $4,000 worth of fabric in one day and that led to $2,000 more in related sales. A New York store had a single order of $7,000 based on the linen products,” Friberg said.

He hopes the surprise success of the fabrics and wallcoverings for Lauren may help him convince department stores to carry Motif products in a similar presentation.

“People don’t think first of their sheets when they’re redoing a bedroom,” he said. “They think first of the color and the fabrics and the walls, so if you sell them wallpaper and fabric, you’re almost guaranteed to sell them something else. That’s the key link that exists.”

With the new 1984 Lauren Lifestyles, the size of Motif’s display will triple in some stores, and many will be carrying stock as well as offering custom order facilities. Motif has 35 wallcovering SKUs and 24 in fabric in the new line.

“A catalog and stock together create more sales than just a catalog by itself,” Friberg asserted.

Salespeople in many Lauren home shops are especially trained to sell the wallcoverings. In addition, an 800 telephone number has been established for customers installing their own wallpaper and for untrained salespeople trying to advise customers on wallpaper purchases. Lauren in their corner

Although fabrics and wallcoverings for the Lauren Lifestyles collection have been available only through the 30 department stores carrying the collection, Motif Design’s own store in Larchmont, N.Y., has just opened its own Ralph Lauren corner, showing the entire range of fabrics and wallcoverings in special displays or vignettes.

Friberg and his wife, Lyn Peterson, opened the Larchmont store in 1975 with an initial investment of $9,000 and went into wallpaper production two years later. The company now does $6 million annually and has become what chairman Frieberg believes is one of the most innovative houses in the wallpaper industry. He sees its future in product design and marketing rather than at retail, believing there are greater opportunities for growth and profit for him on the production end.

The small retail outlet first ventured into wallpaper production in 1977, seeing a lack in the marketplace of papers with a “clean Scandinavian look.” Motif proposed to Ristomatti Ratia that it produce a line of wallcoverings for Marimekko just as the Finnish company was launching its sheet company.

After this first joint venture, coordination of sheets and wallcoverings as a concept approach later was used by Gear and Laura Ashley. Three collections of Marimekko wallpapers are offered at locations across the country.

Collaboration with Marimekko gave Motif an unusual product and a production base for its next line, Whimsical Walls, which Friberg said re-invented the children’s segment. Opposite approach

“Everybody told us, ‘you can’t make money in the children’s segment; it’s too small,’ So we took the opposite approach and looked for high penetration into a small market. At $18 to $19 a roll, Whimsical Walls was one of the top-selling collections in the country when it was first introduced. Now everybody and his brother has followed us.”

Motif has licensed production of coordinating lamps, sheets, stationery, toys, blinds and sleepwear for the Whimsical line.

In an area of heavier competition, Motif then introduced the Rosie collection, a “new, traditional style,” designed to appeal to a market segment that included both older and younger women. Friberg sees presentation of the papers through a catalog as an essential factor in sales. With the Rosie catalog, he combines clean graphics with an image of a leisurely, family-oriented mode of living. A second Rosie collection came out in November as an addition to what is Motif’s top-selling line.

His company’s most recent success, Friberg believes, has been in the high quality and on-time delivery of its segment of the Ralph Lauren program.

Motif was granted the license four years ago, after it approached the Polo organization. Polo’s management was, according to Friberg, in the beginning stages of putting an entire package together and hadn’t considered the fabric and wallpaper angle. Polo later came back to Motif after it had considered a number of other resources. Smallness an asset

Friberg attributes Polo’s interest to the small size of his company. “If you get in with too large a company, it doesn’t have the adaptability that a company our size does. Because we’re small, we had to try harder to be better than other people.”

Motif fabrics come from a number of resources. Some are woven in India, paisleys are printed in Italy, where linens also orginate, wools and tweeds are woven in Ireland and the rest are printed domestically.

Motif fabrics printed in Italy

All of Motif’s wallpapers are handprinted in the United States and finished at three plants in the Northeast before they hit the retail market.

Motif’s introduction for fall market was 62 papers and borders and 42 fabrics in a program totaling 2,500 SKUs.

Friberg is not considering any other licensing programs with designers. He prefers to stick with a few well-known names and support them heavily.

“Our expansion plans are to build up elements of our program. Right now, wallpaper is a heavier percentage of sales than fabric.

We’re doing a major expansion of our fabric lines and possibly will expand laterally into other areas of home furnishings.”

Motif’s ratio of wallpaper to fabrics is about 100 to 40. Friberg hopes it will eventually even out at about 50-50.

“If you look at the marketplace, there are fabric jobbers like Robert Allen who are very good in fabrics and who do nothing in wallpaper. Other people in wallpaper do nothing in fabric, and yet the two are totally related and linked. There are only a few companies that do a good job at both.”

Retail prices for Motif’s wallpapers range from $16 to $24 for the Rosie line, $18 for Whimsical Walls, $21 to $36 for Marimekko and $20 to $75 for Ralph Lauren. Fabrics begin at $20 per yard in all lines, go to $95 for Lauren linens and as high as $145 for a few select items in other lines.

Home improvement for the holidays: the retail analysts who tried to steal Christmas

Well it’s December, and that means the holidays will soon be upon us. There has been a lot of talk recently regarding what retailers can expect in their stockings this year, and for many retail segments it doesn’t look good.

An article that appeared in Fortune magazine last month tided “How Blue will Christmas Be?” (Nov. 11, 2002) talked about how the recent economic climate and the West Coast port shutdown will result in the smallest retail holiday sales increase (2.5 percent) in more than a decade. This comes on the heels of reports earlier this fall that the consumer confidence index hit its lowest level in nearly a decade.

The good news for independent home improvement retailers is that you are somewhat sheltered from these gloomy forecasts for several reasons. First, through the years home improvement retailers have scaled back on traditional holiday-related departments such as toys and sporting goods. And there isn’t as much at stake this time of year as in other retail segments that generate 40 to 50 percent of annual sales during the holiday selling season. Even if you count all of last month, November and December contribute just 15 percent of annual sales in hardware/home improvement stores each year.

Secondly, the home improvement retail sector has been a “bright spot” in the retailing community this year, in part because of consumers’ “urge to nest,” according to the Fortune article. This is consistent with reports from many industry retailers and wholesalers who continue to capitalize on post-9/11 nesting trends and a robust housing market.

Finally, as a privately held business, your store probably hasn’t experienced the fallout that public companies have after a year of corporate scandal on Wall Street. While your personal portfolio may have taken a beating, the value (or the perceived value) of your company hasn’t. Consider what has happened to Home Depot’s stock this year despite reporting healthy sales and double-digit profits.

So as retail analysts and members of the consumer press continue to report that retailing is tanking everywhere, instead of running around yelling that the sky is falling, here are some ideas that might help you give something back this holiday season… and in the process spread some holiday cheer:

* Give Something Back to the Needy–As stewards of your community, donate a portion of your holiday sales to charity. Or give your staff time off to donate their time to the community. Better yet, organize something yourself to benefit those who are less fortunate.

* Give Something Back to Your Employees–They probably aren’t expecting a lot, but a little something in their stocking this month or a holiday dinner party will go a long way to developing employee satisfaction.

* How-To for the Holidays–You offer your how-to expertise to customers the other 11 months of the year, so why not offer a how-to clinic or two with a holiday theme, such as demonstrating turkey flyers (if you sell them) or offering tips on home decorating for the holidays.

* Provide Unique (and Affordable) Gift Ideas–The Fortune article suggested that one reason for the lackluster forecast this year is retailers are “out of touch” with what their customers want, and there is “no real difference between competing stores” anymore. No one knows your customers better than you, so use this to your advantage. Pitch an article to the local newspaper regarding the wonderful gift ideas to be found at the local hardware store. And not just power tools and grills, but your unique niche categories as well. A recent Lowe’s Trendex Study on the subject found 53 percent of those surveyed would like to receive or give a home improvement-related gift this holiday season. Since many retail analysts are predicting that consumers will be looking for discounts this year, be sure to offer plenty of value-priced alternatives to traditional holiday merchandise.

On behalf of all of us here at Do-It-Yourself Retailing, I want to wish you, your family and your employees a happy and safe holiday season and a prosperous New Year.