Specialty stores show strength

NEW YORK — As the only retail channel showing an increase in market share, specialty stores continue their march to dominate the home textiles business.

The specialty store channel increased its share by 2 percentage points, increasing its presence on this year's Top 50 Retail Giants ranking from 22 to 24 percent.

In this channel, four of the Top 5 remained in place with Pottery Barn replacing Ikea in the No. 5 slot.

Specialty stores among the Top 50 also saw their sales increase at the highest percentage level among the six channels — increasing 11.1 percent to $5,028.9 million in 2003.

In contrast, the discount stores/supercenters, while still the dominant segment, saw a slightly declining market share, slipping 1 percentage point to 42 percent of the Top 50.

The discount stores/supercenters on the Top 50 reported only a 2.1 percent increase to $9,098.1 million last year.

The emerging direct-to-consumer channel held its own in market share at 9 percent of the Top 50, but had only a single-digit percentage increase — 3.7 percent — reaching $1,977.3 million in home textiles sales.

In this channel, JCPenney retained its top position as both the catalog and Internet business moved ahead. The Company Store Group remained in second place. Pottery Barn, which was No. 5 in catalog sales last year, moved up to No. 3. Brylane Home slipped from No. 3 to No. 4; and Direct Marketing Services joined the Top 5 in the No. 5 position.

Interestingly, warehouse clubs, which held steady at a 2 percent share of the Top 50 home textiles business, had a double-digit percentage increase, up 10.3 percent to $320 million.

And while department stores have been "reinventing" themselves over recent years, they have managed to show a 3.5 percent increase to $4,155 million. Market share for the department store group slipped 1 percentage point to 19 percent in 2003.

The "other" channel, which is Sears and Lowe's, held its own in terms of market share at 4 percent, but took a 7.7 percent drop in sales due to the 12 percent sales decline at Sears.