By Barbara Thau
NEW YORK–Retailers are looking for a variety of ways to drive home sales the first half of the year: Crate & Barrel will go after the bridal market; Ethan Allen will beef up television advertising; and J.C. Penney is betting big on American Living, its exclusive home and apparel collection from Ralph Lauren.
Merchants interviewed during the National Retail Federation’s Annual Convention and Expo here didn’t mince word on the state of the home business: The category has been in a major funk as the housing market slump and a sluggish economy have conspired to drag down the sector, they said.
“People are postponing purchases—particularly in the home furnishings area,” Walter Loeb, retail analyst and founder of Walter Loeb Associates, told HFN. “The stores are promoting heavily to bring consumers in.”
Myron Ullman, chairman and chief executive officer of J.C. Penney, said big-ticket home goods “continue to be weak due to the general malaise in the housing sector. Still, we’ve seen strength in housewares and some soft home fashions.”
But it’s the American Living line, J.C. Penney’s biggest brand launch in the history of the company, that’s got Ullman really pumped. “It will bring newness and excitement to the store and fill white spaces that we’ve identified,” he said.
Ten percent of the marketing budget for the American Living line was earmarked for a big blowout advertising push during the Academy Awards—what Ullman called “the Super Bowl for women.” The retailer has debuted major ad campaigns during the Oscars in the past two years.
The writers’ strike may put a crimp in that plan, however. While it will save J.C. Penney “a lot of money” not to advertise during the Oscars, the bigger loss would be missing out on the huge exposure the show would grant the home and apparel collection, Ullman said.
The home business at Crate & Barrel “was difficult, just like for everybody else [during the holidays],” Gordon Segal, CEO, told HFN. “But we did better than most. We did most everything right—there were just fewer customers in the stores.”
Still, “we had a great overall year, even with a mediocre [fourth quarter],” he said.
This year, Crate & Barrel is tackling the bridal market, Segal said. The retailer is partnering with Real Simple magazine “on the guide to the wedding of your dreams.”
Crate & Barrel will make its international debut with a new store in Canada this year.
McKay Belk, president and chief merchandising officer of Belk department stores, said the home business has been challenging, particularly as the job market has been tough in the South, where the retailer’s stores are clustered and where the housing slump is significant. But Belk’s exclusive Biltmore For Your Home brand—inspired by the Biltmore Estate in North Carolina—has been a major hit at the chain, he said. And this year, the retailer will roll out the collection to more stores. “It’s quickly becoming our biggest home brand,” Belk said.
January is when Ethan Allen’s business picks up, Farooq Kathwari, chief executive officer of Ethan Allen, told HFN.
This fall, the retailer revved up its national TV campaign, and “increased the quality and value of our mix,” Kathwari said.
Over the past two years, the retailer has been transitioning from a furniture retailer to an interior design business. Today, Ethan Allen boasts 3,000 designers.
Despite the macroeconomic picture, “we’re cautiously optimistic” about the business, Kathwari said.
