Brand new dilemma

Jennifer Marks, editor-in-chief -- Home Textiles Today, 5/27/2002 12:00:00 AM

Brands, shmands. That's been the thinking where home textiles are concerned.

But for a product category where brands supposedly have little real impact, there's an awful lot of brand maneuvering going on lately.

Consider Federated, which has proclaimed it will henceforth boot any brand from its matrix that sublicenses itself to mass or discount stores. That's a pretty gutsy move, especially taking into consideration how many of its brands are already doing business in other channels.

Few would argue that department stores need to overhaul their operations. The distressing lack of growth in that arena is what prompted brand migration in the first place. And it raises the question of which party in the duo has the greater need of the other — the brand or the department stores.

Take the example of Kohl's, which builds its merchandising proposition around offering nationally recognized brands. So powerful are brands in the Kohl's equation that its top 10 do 20 percent of its $7.5 billion in annual revenues — or roughly $1.5 billion. Halfway into 2000, Kohl's lured Columbia sportswear into its apparel stable. Within 18 months, Columbia had jumped into the company's highly productive Top 10 roster. Oshkosh, which joined the Kohl's fold just three months ago, is doing so much business that it is likely to land in the Top 20 by yearend, part of a hardworking group that accounts for 50 percent of the company's sales.

If Kohl's getting behind a supplier's brand can turn that much business that quickly, what's a brand's incentive for hanging around Rich's/Lazarus/ Goldsmith's?

In home textiles terms, the stakes run just as high. There is but one home brand in Kohl's top 10 — Fieldcrest — and it's been part of that august group for the past 10 years. Now that Martex has joined the domestic department (under the Martex Platinum sub-brand), it will be interesting to see if there's room for two home brands in the top 10. And if not, which brand will perch in the catbird seat. As Columbia and Oshkosh have demonstrated, the right brand with the right backing from Kohl's can go a long way in a hurry.

Kohl's acknowledges that it is looking for similarly recognizable brands in home textiles. But Jack Moore, executive vp, merchandising, added an interesting caveat, pointing out that an established family of industry brands is now going up against a growing collection of licensed brands. "I think the traditional industry brands have more competition than ever," he said.

Ironically, Kohl's isn't interested in acquiring brand exclusives — licensed or otherwise — after the fashion of Target Stores. The whole point of offering nationally recognized brands at moderate price points, Kohl's executives say, is that its shoppers have a real point of comparison between Kohl's pricing and that of department stores. So if Federated ultimately lives up to its prohibition against migratory brands, and if other department stores follow suit, it would become more difficult for Kohl's to execute its fundamental mission.

But that's only assuming that consumers see the situation as Federated sees it. It's likely that most regular Kohl's shoppers aren't spending much time at department stores anyway.