Raschel throws challenge high-piles

Don Hogsett, Jeff Linville, February 3, 2003

For decades, high-pile acrylic throws, mostly in traditional jacquard looks, have dominated the U.S. market in plush throws. But now they're getting stiff competition from more upscale, more colorful and softer raschel knits, which have gobbled up as much as 20 percent of the market in just five years.

"They came out of nowhere just about five years ago, and I'd say they now own about 20 percent of the market," said Richard Wernau, U.S. sales chief for Hometex Products, the U.S. marketing arm of Mexican home fashions producer San Marcos. "They've pretty much taken over the upstairs business, leaving high-pile acrylics pretty much at the mass merchant level. And because of the softness of the product and the vivid colors you can get in knits as opposed to jacquard, they're really making inroads in infants products."

For years, raschel knit throws, mostly imported from Mexico, had nibbled at the fringes of the plush throw market as a more colorful, but pricier, alternative to jacquards.

But all that changed five years ago when The Northwest Company, a New York-based producer of jacquard woven throws, turned its back on traditional woven jacquards and bet the farm on the newer, brighter raschel knits. "And we've never looked back," said Stan Mieszkowski, Northwest vp of sales and marketing. "It's been a great business for us."

Addressing the raschel knit's higher price point, Mieszkowski said, "From the beginning we positioned it as a medium to upstairs business, and we thought it would be an ideal vehicle for the licensed products we specialize in. And it's done very well with licenses in department stores and catalogs. For us, it's a license-driven business." Indeed, said Mieszkowski, just three licenses — SpongeBob SquarePants, the National Football League and Barbie — account for about 70 percent of sales of Northwest's Royal Plus raschel knits. "But then you'd expect that, since NFL by itself is 32 teams."

A key advantage to raschel knits, said Mieszkowski, in addition to the softer, more supple hand, is the number of colors available in printed raschels. "You're talking eight colors vs. two colors, knits vs. woven. No contest. And the prints give you a much crisper image."

But all those selling points, he said, add up to a higher average selling price. "The raschels are about 30 percent to 40 percent higher than the jacquard wovens. That's too expensive for discounters, but the licenses let you take the product upstairs."

Mieszkowski also likes the margin in raschels. "The jacquard wovens are easy to import and available everywhere, so I'm guessing margins are a little more compressed. But the margins are much stronger in raschels, since there are only so many places you can go."

The 500-pound gorilla in high-pile acrylics, now as then, is Biederlack of America, based in Cumberland, MD. With about $47 million in throw sales last year, Biederlack owns a commanding market share of the mass merchant high-pile business.

And while rashcels have made some inroads, "the high-pile acrylic business is here to stay," said Peter McCabe, Biederlack executive vp. "That business isn't going away until Biederlack says it's going away. We're the dominant player."

While king of the hill in jacquards, Biederlack is looking to broaden its base, McCabe noted, and has already diversified into fleece and cotton/acrylic blend throws. "We are always looking for ways to build the business. The problem you have is that as you diversify, you still want to hold on to the high-pile as the promotional item. And you don't want to do anything that threatens or dilutes that bedrock business. You don't want one product stealing business away from another — then what have you gained?"

Biederlack, said McCabe, saw growth last year in all three of its throw businesses, woven acrylics, fleece and cotton/acrylic blends. "The biggest growth was in our Prima product, the cotton/ acrylic blend. We saw a big increase in that. Now we have to keep the momentum going."

About 60 percent of Biederlack's throw business is still in woven acrylics, said McCabe, with fleece accounting for roughly 25 percent, and 15 percent coming out of blends. "We have a tremendous investment in skus in traditional high piles. You have to figure out what to do with that as you migrate customers to a new product."

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