Photo by Sebastian Pena Lambarri on Unsplash

The good news from HTT’s annual Top 50 Retailing Giants report is that 46 retailers grew their home textiles business last year – 28 of them by double digits.

The hard reality, of course, is that 2022 is no 2021. The consumers most impacted by inflation, which is the bulk of them, are now spending less on discretionary goods, especially in home. The business has gotten tougher and is likely to remain so into next year. The big, delicious bubble has burst. I doubt that by the time HTT’s head of research tallies the numbers on this year’s soft home sales that we will end up with an equal preponderance of gainers.

In such a climate, it would be wise to think beyond the “We’ve got six of the top accounts, so we’re good” mindset. The double-digit gainers for 2021 include major retailers at the top of the ranking that you would probably expect, such as Target, Amazon, HomeGoods and Overstock. It also includes a raft of retailers toward the bottom of the list such as Ashley Home Store, Boscov’s, Citi Trends and Ethan Allen.

In terms of account size, the latter are what a long-ago colleague of mine would refer to as “little pishers.” He was a sales rep, so he wanted to chase the big fish, not the little pishers.

Let’s look at who some of the big fish were at that time. Sears was a Top 10 account. It no longer ranks at all among the Top 50. Linens ‘N Things was a Top 10 account as recently as 2008. By the end of that year, it was gone. Mervyn’s did nearly $400 million in soft home sales, about what Lowe’s does today. Gone. HomePlace was on a par with QVC/HSN. Gone.

I would strongly advise vendors to look to the lower ledger of the Top 50. Are you doing business any of them? Sure, not all of them are going to climb the ladder, but most of them do a steady business year after year.

Retailers, I would make the same case to you about suppliers. Just six of the Top 15 Supplier Giants in the era when my colleague was dismissing little pishers are still around today. Only three still rank among the Top 15.

Some accounts and some suppliers disappear over time. Others collapse all at once. You can hope for the slow fade, but you should be prepared for the sudden crash. Spread your risk

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Finally, volume retailers have gotten their hands on all that lovely home merchandise they were chasing after for months. Alas, the bounty arrived just as consumers decided they need to be more mindful of their spending. And when they do lay out their cash, they’re pretty much set with home stuff, thank you very much.

Suppliers have been saying since early this year that buyers were starting to pull back on order writing. More recently, we’ve been hearing that some buyers are completely done with orders for 2022. That state of affairs was confirmed in late May as a parade of major home textiles retailers reported their first quarter results.

Macy’s singled out soft home in particular as a popular pandemic category that has suddenly lost its luster. In the short space between Q4 2021 and Q1 2022, the department store saw a 20 point drop in sales of home textiles, casual apparel and activewear. Company chairman and CEO Jeff Gennette described the downturn as “more extreme than we expected.” Go-forward orders have been adjusted accordingly.

The era of major home makeovers seems to have ended for Target’s shoppers as well. Home saw a rapid slowdown of year-over-year sales beginning in March. While some of that was expected, “we didn’t anticipate the magnitude of that shift,” said chairman and CEO Brian Cornell. Overloaded with inventory, Target has opted to cut prices as it works to right-size its assortments.

At Ross Stores, apparel has re-asserted itself as the sales-driving category. While the off-pricer sees boatloads of deals on home goods in the market, it may not wind up buying many of them. Ross received its Q2 home goods imports earlier than expected, and with demand for the category declining, it has chucked them in packaway and will flow the merchandise later in the year as warranted.

The story rolled on similarly at Walmart (customers pivoting away from discretionary goods), Kohl’s (home sales down 17% and demand expected to remain weak) and Big Lots (moving focus to opening price points and looking for close-out opportunities).

To be fair, home wasn’t a washout everywhere. TJX Cos.’ home comp fell back in against a tough comparison, but sales remained solid. Williams Sonoma Inc.’s nameplates had a pretty strong first quarter as well.

It’s also important to remember that even the retailers that failed to shine in the first quarter are generating better sales than they were in 2019.

So, what are suppliers to do about it? They’ll do what they’ve done in every other calamity that has besieged this crazy business. Dig in, innovate and differentiative. The bubble has popped. Time to get back to the regular order of business.

The word “unprecedented” has gotten quite a workout over the past four years, and justifiably so.

This summer will mark the fourth anniversary of former President Trump’s tariffs on Chinese imports, a serious development that added costs to home textiles merchandise. Anyone who hoped the tariffs would be rescinded with the arrival of a new administration has thus far been disappointed.

Then came Covid-19, then shutdowns, then a boom in spending on home goods, then the colossal cock-up of the supply chain system, which is with us still. Now we have added a war in eastern Europe and inflation into the mix.

Each of these is a once-in-a-career event for any business, but we live in an era when one unprecedented disruption has cascaded on top of another.

Shifting through the plethora of prognostications and forecasts out there brings to mind that Schoolhouse Rock ditty “Conjunction Junction,” which advises us the “and, but and or will take you pretty far.” Because “and” and “but” are frequent qualifiers in the current environment.

The National Retail Federation last month reasserted its rosy forecast that retail sales for 2022 will increase between 6%-8%. The reasons: job growth AND wage increases AND strong household savings. BUT with inflation reaching a 40-year high AND strong consumer demand running up against restricted supply, the picture becomes more complicated.

There were more conjunctions swirling through a pair of Houzz surveys tracking residential renovation market activity.

Renovation activity this year looks healthy, with 55% of homeowners planning to renovate, 46% planning to decorate AND, for the first time since 2018, homeowners’ planned spend jumping to $15,000, up $5,000.

BUT professionals in the construction, architectural and design services sectors are tempering their expectations. Lengthy backlogs persisted in Q2 AND the pros worry future business may stall due to inflation, supply chain delays and rising costs for materials.

Similarly, consumer sentiment has become muddled. The April Consumer Confidence Index found that consumers’ short-term outlook for income, business and labor market conditions ticked up to 77.2 from 76.7. BUT their assessment of their present situation fell to 152.6 from 153.8 in March. Vacation intentions cooled BUT intentions to buy big-ticket items rose, AND purchasing intentions are down overall from recent levels.

Suppliers in every category of home textiles have reported that retail orders began falling off earlier this year. Raw material prices had been rising for months and freight costs remained high – and everyone knew that double-digit consumer spending on home furnishings had to run its course at some point.

BUT there is still hope that if inflation can be constrained, the housing market will deliver a few years of Gen Z-driven growth.

Dizzy yet?

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For the first time in a very long time, big pencil retailers turned out in person for home textiles market. And for the first time since fall 2019, a good number of showrooms opened their doors for face[1]to-face appointments.

Although more suppliers rolled out the welcome mat for spring market than had done so during the tentative fall 2021 market, most expected a heavy schedule of virtual appointments. Several con[1]fessed they’d had no intention of freshening up their spaces. Others had not planned to come into the city at all. But around March 7, retailers started ringing them up for in-person visits, so vendors sprang into action.

When all was said and done, all but four major retailers sent at least a few buyers to the New York Home Fashions Market, even if they didn’t bring the full battalion.

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The spring New York Home Fashions Markets arrived at an apt moment. After nearly 18 months of scrambling to find enough inventory to slap onto shelves and feed the explosion of e-commerce orders, suppliers and retailers are in a position to consider what suits consumers’ needs and wants as the country transitions from pandemic to endemic mode. Focus is shifting from “What can you deliver right now?” to “What white spaces do we need to address?”

New products have always been the bread and butter of market week, but this time around suppliers were pushing NEWNESS – with an exclamation point.

Buyers weren’t the only ones pounding the pavement. Several companies that are currently without showroom space were making the rounds to check out real estate along 5th Avenue. Some were showing in temp spaces; others came in to just get a sense of the market.

While it would be foolhardy to bet that fall market will mark a complete return to the pre-pandemic order, there was a sense last month that home textiles market is moving toward a new normal.

It’s another hybrid New York Home Fashions Market this week – but more suppliers are opening their doors for in-person appointments and a few more buyers coming to town than last fall.

Although the event isn’t shaping up to be the return to a full, traditional market everyone is still looking forward to, it’s a step in the right direction. For many in the industry, this will be their first experience of New York market since the former showroom hub at 295 Fifth Ave. emptied out in spring 2020.

The largest concentration of companies is now located at 230 Fifth Ave. and there is a decently sized cluster at 267 Fifth Ave., including temporaries. Nearly all of the relocated showrooms are still on or just off of Fifth Avenue. The “market route” along Fifth Avenue now extends from 27th Street to roughly 37th Street.

To help the industry orient itself, HTT has published an online supplier directory – our first update since 2019, aka the “before times.” You can find it at hometextilesweek.com. Access to the directory is free and requires a one-time registration to enter.

So what do you need to know as you head into the showrooms and/or virtual meetings?

At several leading retailers, the concept of sustainability is going well beyond the use of recycled fibers. The tick list also includes circularity, naturally derived dyes and finishes and low-impact production methods. Reducing one’s carbon footprint is the latest must-do on major retailers’ menu of sustainability goals. That is especially true for the supply chain and increasingly extends to packaging.

In addition, the most committed retailers are pivoting from CSR (corporate social responsibility) to ESG (environmental, social and governance). They are creating benchmarks for diversity in hiring and career development, fair wages and working conditions for employees and positive social impact in the communities where employs and customers live. Suppliers whose values and activities align with those goals will have a leg up.

Pricing, of course, remains a huge concern. Major retailers continue to tell analysts they don’t see any price deflation coming from freight or raw materials for the foreseeable futures. They are being mindful of where they take their price increases within their product categories and pricing tiers. Opening price point goods are where retailers and vendors have to take the biggest hit on margin.

Introducing a new brand? Yay. Do you have an influencer/HGTV personality/TikTok star promoting it on their social media? This is quickly becoming the backbone of a well-planned brand strategy, especially in the licensed space.

If you’re coming to town, welcome back to New York. If not, we hope to see you this September. Either way, go forth and embrace some great new products.

The big get bigger. The rich get richer. To the victor go the spoils. Those enduring aphorisms certainly reflect how the retail landscape has been morphed by the pandemic.

There’s no question that Amazon, Walmart, Target and Costco have cemented their leadership positions and captured enormous market share. They have it all, literally, from bedding to broccoli to baby formula. And they have the ability to keep on getting it, being massive enough to call first dibs on vendor wares even when goods are in short supply. One retail forecaster I spoke with recently refers to them as “The Big Four.” I’m going to call them “Top Dogs.”

There is a furious scramble in the middle of the retail pack for market share goodies. A few of the traditional mid-tier retailers have gained new customers and are working mightily to hang onto them. Kohl’s added 2 million in 2020 and reported that 25% of customers coming in to see the new Sephora shop-in-shops are new. Macy’s reeled in more than 4 million new shoppers in the third quarter, up 28% year-over-year. TJX in November heralded an influx of new customers and greater market share, although the company didn’t put a number on it.

You’ve got to credit Bed Bath & Beyond for looking at what the Top Dogs have that those in the middle lack – grocery – and making a move on it. One of the most intriguing launches in 2022 will be BBB’s partnership with Kroger. A curated selection of home and baby products from Bed Bath & Beyond and its buybuy Baby nameplate will be made available on Kroger’s website. In addition, an unknown number of Kroger grocery formats will pilot small-scale assortments in physical stores.

Look, too, at activity among the ankle biters – the plethora of narrowly defined, digitally native brands whose ranks seem to swell relentlessly. By themselves, their home textiles volume amounts to a mere flesh wound on the hide of a big volume husky. Brooklinen and Boll & Branch – by HTT’s estimates the soft home leaders in this space – each generate about as much home textiles sales annually as 15 Walmart stores.

But in the aggregate, the small dogs are energetic and have proven adept at customer engagement. They are very much pushing their snouts into the bowl for a bigger serving of Alpo. Digitally native mattress brands have added bedding. Bedding brands are moving into bath and soft accessories. Pure-plays are heading into the physical realm through shop-in-shops with the Alphas and on their own.

In some cases, their bark may turn out to be worse than their bite. But it is sobering to recall how quickly a big dog can lose stature or fade into oblivion. Ten years ago, JCPenney was doing over $1 billion in home textiles sales – more than double the volume of the soft home business at HomeGoods and Amazon at the time. Kmart was a top-tier retail account and Wayfair wasn’t even on the radar. In. Just. Ten. Years.

More proof that no matter what changes, it’s still a dog eat dog world.

In physics, the delta symbol is used to represent a change or a difference in some quantity. So it is apt that the Covid-19 variant which has scrambled planning for the fall New York Home Fashions Market is the Delta.

You may recall that as recently as July, it looked as though there would be a fairly healthy contingent of retailers coming into the city for in-person showroom meetings. The Home Fashion Products Association assembled a list for internal planning purposes. I won’t identify the players, but collectively the “we’re definitely coming” retailers account for a few billion dollars in annual home textiles sales and the “we’re waiting to get an okay to travel” retailers account for another $1.5 billion or so.

There were three highly significant retailers in the “definitely not” column, one of which does not always attend during the actual market week. Still, it was a pretty encouraging tally, and some suppliers that are not based in New York began seriously thinking about flying in to set up their showrooms.

Enter the Delta. By early August it was spreading rapidly across the country, and “definitely coming” retailers and suppliers not based in the Tri-State area hit the pause button. By the time Labor Day rolled around, there were only two major out-of-town retailers still on the fence. The other big guns had resigned themselves to another PowerPoint/virtual reality/Zoom  market, and New York area suppliers who stuck to their plan to open up for visitors realized the crowd would mostly consist of locals.

And yet…

I’m finding there will be more open doors than I would have expected.  There will be boatloads of virtual meetings, of course, and they will once again stretch past the official market week dates.

Given the way things were looking in early September, I figured I would end up doing two days of in-person appointments and spend the rest of the week in virtual meetings. By mid-September, I was wondering whether two days might be overly optimistic. I’m now booked into Wednesday with in-person meetings.

There are a few certainties, however. Because this year’s fall market was always expected to be something of a hybrid, HTT will once again host a series of online events. The program kicks off Monday morning, Oct. 4, with JCPenney EVP/chief merchandising officer Michelle Wlazlo in an exclusive interview, and wraps late Tuesday afternoon, Oct. 5, with our Trailblazers & Titans awards ceremony and virtual cocktail party.

The program also includes panel discussions on M&A activity in the home goods market and trends in the better goods market.

All events are free of charge to those who register at www.hometextilesweek.com.

The only thing you can’t catch if you miss it live is the Trailblazers & Titans cocktail party on Zoom – which gives you a chance to mix with this year’s honorees (Big Lots, Casper, Trident and Pegasus Home Fashions) as well as industry colleagues. That’s Oct. 5 at 5 p.m. ET. Pin that to the calendar.

And have a great market week. Whatever form they take, market weeks are always worth the time.

Retailers and suppliers find themselves in a peculiar situation at the moment.

There aren’t enough shipping containers. The ones that can be had are way too expensive. In addition, they’re either stuck in Asian ports that have temporarily shut down, or they’re jammed up outside U.S. ports waiting to dock. Once the containers make it to shore, importers face a lack of warehousing availability as well as truck and rail capacity.

And yet the sales keep on churning. In August, sales at furniture and home furnishings stores rose 3.7% month-over-month seasonally adjusted and climbed 16.1% unadjusted year-over-year. That beat the pace of total U.S. retail sales, which were up 2.3% seasonally adjusted from July and up 12% unadjusted year-over-year, excluding sales from automobile dealers, gasoline stations and restaurants.

As those registers were ringing in August, retailers were announcing their second quarter and first half results. Not surprisingly, many of the companies that were big winners in 2020 are still doing a strong business.

TJX Cos. execs described the pace of the home business as “phenomenal” across all divisions. That was especially true at the HomeGoods division, where total sales for the first half of this year were up nearly 112%.

Target blew past its earnings estimates, and executives said they were anticipating a strong, albeit somewhat volatile, second half. The home department’s same-store sales rose in the low single-digit range after explosive comp growth of more than 30% in the year-ago period. Back-to College got off to a strong start, and Target shoppers are amped up for this year’s holiday celebrations, the company said.

Overstock’s active customers reached 9.2 million in the second quarter, jumping 31% year over year. In addition, average order value climbed 33% to $213. The pure play home furnishings specialist is betting consumers will continue migrating online.

The Williams-Sonoma Inc. portfolio of retail formats collectively generated Q2 sales and comp gains in the 30% range. The company said it sees no slack in consumer interest in home and is aiming to grab a bigger share of the pie. By 2024, it expects West Elm to grow revenue to $3 billion and the Pottery Barn brands to reach $5 billion.

Macy’s and Kohl’s, both of which were partly sidelined by pandemic store closings last year, are happier with the trajectory of business this year.

Macy’s has been growing its loyalty membership program, particularly among consumers under the age of 40. Apparel is bouncing back, but home still has momentum. To appeal to younger consumers, Macy’s is launching a new private-label home and textiles brand for more socially-conscious customers called Oak.

Kohl’s has been focused on rebuilding its apparel business, which took a heavy hit last year, and is making headway. Home remains a top performing category on a two-year basis, and the retailer is pushing to boost inventory turns across the store.

Among this group, nearly all of them were sufficiently buoyed by sales trends to raise their guidance – although with numerous caveats about the spread of Delta virus and the ongoing disconnect in the supply chain.

A case of irrational exuberance? We’ll see. But many top home textiles retailers expect the big tide to keep rolling in for a while.

A lot has changed since the last spring, when the New York Home Fashions Market was abruptly called off as an in-person event because of the rapidly spreading pandemic.

By late spring, however, home products sales began booming – and kept on going. According to data from The NPD Group, home textiles sales shot up 16% from January through November 2020. Many retailers expect the hot streak to continue through this year.

Now the industry prepares to meet for its second pre-planned virtual New York market. Everyone is pretty well seasoned in the art of screen-to-screen interaction at this point and they’re looking to up their game for market.

HTT has upped its game, too. Our platform, co-sponsored by the Home Fashion Products Association (HFPA), is more interactive and searchable than the one we used last fall. We’ve also beefed up our programming.

Opening day, March 22, will be bookended by two keynote events. Melissa Gonzalez, CEO of The Lion’esque Group and an ABC radio contributor, will discuss the future of physical retailing. It’s going to be very insightful. The day wraps up with a one-on-one conversation with Joe Hartsig, EVP, chief merchandising officer of Bed Bath & Beyond, and president of Harmon Stores Inc. A rare treat.

We’re also throwing some fun into the mix. Each day we’ll post up a special feature called The Question, with the said “question of the day” being answered by leaders from several supplier companies.

On Tuesday, March 23 at 5 p.m., we’re hosting a lively networking session in tandem with our celebration of six home textiles companies that are doing outstanding work in digital.

Bringing it all home on Wednesday, March 24 at 5 p.m., industry veterans Warren Shoulberg and Mark Grand will host a live Game Night. Audience participation in the trivia competition – don’t worry, it’s general knowledge stuff – is highly encouraged, and we will be awarding $50 gift cards.

You’ll also want to check out our roster of informational sessions. They’ll cover hot topics like consumer research, global design trends and the latest developments on the fibers and performance finishes front.

Access to the interactive showrooms, vendor listings and recordings of all the programs will remain live for six months – but only for those who have registered. If you don’t do so by the end of market week, you’ll have missed the boat, along with an opportunity to revisit at your leisure and convenience. Best of all, it’s free. So get over to hometextilesweek.com to sign up!

Happy (socially distanced) hunting, everybody.

The year isn’t getting started in quite the way we might have hoped for a few months ago. Nearly the entire winter/ spring trade show season has been shuffled around, with Las Vegas Market moving to April, Heimtextil moving to May and High Point moving to June. The New York Home Fashions Market will take place on schedule in March, but will once again occur as a virtual event.

Although health officials predict a bleak season for COVID-19 cases over the first several weeks of the year, we don’t appear to be headed into massive retail shut-downs of the sort that upended the business in spring 2020.

Which is good because we’re still rebalancing in the wake of the permanent retail shutdowns caused by companies that never made it out of bankruptcy or those that are reducing their physical store footprints.

A few contours of “the new normal” are taking shape, though.

More e-commerce, fewer stores. Hundreds of stores were erased as part of downsizing initiatives even before the COVID era. More flushed out completely by the end of 2020, including Pier 1, Gordmans/Stage Stores and Stein Mart. E-commerce sales jumped during temporary store closures at the beginning of the pandemic, but share held at a higher rate even after brick & mortar reopened. According The NPD Group, online accounted for 29% of home textiles sales from July through September, up from 23% during the same period of 2019. Joe Derochowski, NPD’s president and home industry advisor, expects the number may settle for a little while, but will ultimately move up to 40% or maybe even 50%.

More suppliers going DTC. This one is a no-brainer for companies that already have significant drop-ship business, especially those with brands or brand-building know-how. There are quite a few that already have direct-to-consumer online businesses, although that segment doesn’t yet account for a major part of their sales. Others operated branded stores on Amazon Marketplace. We will surely see more.

The home focus gamble. The big question for everyone in the home furnishings industry is how long the consumer investment in home last. Making an accurate estimate is no small matter. Plan too conservatively and you wind up losing out on millions in business. Stock up too optimistically and you’ll be stuck with a lot of dead inventory once the bubble goes pop. Most major retail execs who were asked the question during their November/December quarterly calls said they expect the trend to carry through most of 2021.

Of course, it’s possible we’re already in the “new normal” given that the retail business is ever-changing and frequently buffeted by events beyond its control. Remember, it was only a year ago that tariffs seemed to be the biggest issue at hand. The industry will pull through. It always does.