A Game Changer for Custom Windows?

Jill Rowen, Staff Staff, February 8, 2011

PLANO, TEXASPLANO, TEXAS - JCPenney's announcement that it will pare down its in-store custom window business significantly is now rippling through the textiles industry with mixed reactions.
     Long held as a leader in the category - probably "owning" about one-third of the window business - the decision leaves room for other retailers to take a bigger piece of the pie. But some think the move simply highlights what were already very under-performing markets within the chain.
     As part of a reorganization of its custom decorating business, JCPenney will reduce 525 in-store custom decorating studios to 300 studios in key markets. In addition, it will close its Sacramento, Calif., custom decorating fabrication facility, which will leave one remaining facility in Statesville, N.C., where staffing will be increased.
     "[The change] may not have a huge impact, as JCPenney is probably keeping their largest, most successful design studios and consolidating within markets," reported Jan Jessup, a spokesperson for Calico Corners. "However, it may cause consumers to look at other sources for custom window treatments and Calico has an excellent reputation in this area."
     "Each year, the Calico inhome design consultants and sales associates see a large number of homeowners who have received rather high estimates for JC Penney custom window treatments - and these consumers are looking for alternatives," noted Jessup. "Calico has a larger range of fashion-forward fabrics, better prices and more choices for their windows, plus custom options for upholstered furniture and custom bedding (which Penney's doesn't offer)."
     "This will leave between 100 to 200 decorating consultants looking for work; they are among the best trained chain store consultants in the industry," noted Steve Bursten, Exciting Windows, Bethesda, Md., who agrees that the impact on sales will be tempered by concentrating on its better markets.
     "Over the counter and in-store sales may not be hit too hard. The custom department is for customers who want the best looks and professional advice; the in-stores sales of window coverings are for the DIY crowd who are trying to save money on simple treatments," he said. "It's a great opportunity for competitor growth where the studios are closed - I would love to get that list."
     "I'm sure we'll get inquiries, but they've never been a big player in our circle," noted Ken McWilliams, owner, ABC Blinds, Austin, Texas. "We're well-known in our space and have a long history - 60 years in business - I don't think the impact will be huge for us."
     "I have a lot of respect for them and they were clearly the largest player, but it's a small part of their overall business," said Bruce Heyman, owner, Metropolitan Window Fashions, North Plainfield, N.J. "For us, it's our main focus. Both our ready-made and custom businesses were up last year. Better goods are still selling. This is an industry where smaller players may actually do better."
     "That's putting a lot of money on the table for other people to grab at," said Jeff Kalpan, owner, Innu Window, Natick, Mass.
     But like some other independents, Kaplan noted that he "didn't run into Penney's that much," aiming instead for a higher-end customer. "It's more of a sign that the middle is disappearing. People will either buy packaged goods or go to a better custom window retailer," he said. "Our own ready-made business is stagnant. But our custom, high-end business has continued to grow and grow."
     Kaplan believes a chain as large as Penney's probably had its share of mistakes and remakes impacting the bottom line. And, he pointed to Hunter Douglas as an example of a brand that changed the way it did business with chain stores, making a strategic decision to focus on custom customers. (In early 2010, Hunter Douglas stopped third-party internet sales. The Home Depot site, for instance, now directs consumers to call a consultant for help.)
     The Penney's announcement also leaves room for other internet and franchise retailers to grow their business. According to Bursten, Customer Decorators may likely become a big player; while Kaplan pointed to online's Smith & Nobel as an up and comer. It may be a while until the impact of Penney's decision is fully felt. But whatever the outcome, it does leave room for a new leader in the category.

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