LIGHTING FIXTURES; BED BATH & BEYOND AND LINENS 'N THINGS MAY LOOK ALIKE BUT THEIR METHODS DIFFER SIGNIFICANTLY.
NEW YORK-While the two linens superstores, Bed Bath & Beyond and Linens 'n Things, look alike on the surface, their philosophies and merchandising strategies differ significantly.
This is particularly true in the lighting department, where Bed Bath & Beyond's mix of high-volume items is viewed as more mass-oriented than the evolving fashion statements at Linens 'n Things, which are likened to the look of Pottery Barn or Crate & Barrel at a discount.
To be sure, one must consider the big picture.
Linens 'n Things, which agreed to be purchased last week by Apollo Management LP, along with other co-investors, has been struggling with sluggish sales and traffic in its 527 stores. Initiatives undertaken to "emphasize fashion and better price points in our merchandise assortment resulted in a weaker value perception to our guests," Norman Axelrod, chief executive officer, said in explaining weak third-quarter results. Linens 'n Things vowed to improve its holiday mix under Jane Gilmartin, who took over as chief merchandising officer in July. Indeed, merchants there must strike a balance between fashion, which can be risky, and the safer commodity and basic goods.
In its lighting mix, Linens 'n Things differentiates itself through such fashion statements as the menswear-inspired fall season lamps from CNB (featuring tweed, boucle ribbon, dupioni silk drum and burlap shades); its new novelty endcap rollout featuring neon and motion lights; and its back-to-school set and CosmoGirl lamps addressing the tween crowd. Furthermore, its exclusive Nate Berkus collection, which analysts said has seen good early success, includes a distinctive range of lamps made from natural materials. Meanwhile, Bed Bath & Beyond continues to post stellar financial results. Its $5.1 billion in sales last year was almost twice that of Linens 'n Things ($2.7 billion). With its 686 stores, Bed Bath & Beyond grew market share twice as fast as its rival last year, according to HFN's top retailer survey, thanks to consistent "expert merchandising," analysts and industry sources said.
Bed Bath & Beyond's lighting department reflects this hunger for sales and earnings growth, as it delves much less into the risky fashion and color statements, opting for urban contemporary, transitional styles and proven silhouettes. The retailer is also the clear leader in impulse merchandising, having filled every available square inch of its department with energy-saving light bulbs, night-lights, touch lights, lanterns, extension cords, surge protectors and other accessory products.
Both chains have mix-and-match programs, packaged and displayed neatly in equal attempts to make the shade-matching easy for consumers.
Vendors familiar with both operations said an item in Bed Bath & Beyond's mix-and-match program outsells a similar piece at Linens 'n Things by a three-to-one ratio.
"The difference is in their mentality," said one lighting executive. "Linens is anticipating failure before they even make a buy. Every buy LNT makes, they're worried about marking it down. They're small time."
On the other hand, this vendor said, "Bed Bath & Beyond comes in and looks for great stuff, and tries to figure out how much they can crank out. They'll work with you to drive business."
Bed Bath & Beyond's full-size lamp base selection is more transitional and contemporary, in incremental prices from $19.99 reaching to the higher $59.99 ticket for a B. Smith terra-cotta finish iron piece. Several extra-large bases (up to 33 inches) in resin and iron are offered for $49.99. Linens 'n Things' mix-and-match seems to have more traditional silhouettes and finishes, ranging from $29.99 to $39.99, but its shade assortment seems more extensive, with several fashion color, pattern and material options. Both also have mix-and-match accent lamps.
The biggest contrast in product mix can be seen in desk lamps, where Bed Bath & Beyond emphasizes the fast-growing "natural daylight" or "full spectrum" niche, with opening-price-point flip lamps for $39.99; Tensor's VisionMax desk styles for $59.99; and Ott-Lite desk models for $79.99 and floor models for $99.99. Several stores have "comparator" displays, allowing consumers to compare color produced by regular light bulbs and under the Ott-Lite bulb.
Linens 'n Things' recent four-foot section devoted to the category is still limited to half the chain, and features three desks ($39.99) and two floor lamps ($59.99) in brushed steel, brushed brass and copper from newcomer Normande Lighting.
One promotional area that both continue to pursue is the "Roomful of Lamps" combo packs. Industry sources said that business has plateaued, and vendors are working with the merchants to create better values and product options for consumers. Recently in stores, Linens 'n Things featured a $39.99 two-pack of buffets; $59.99 for a table and floor; $79.99 for two buffets and a floor lamp; and $129 for two tables and a floor.
Beyond the merchandise mix, both chains were criticized by vendors for such business practices as chargebacks, advertising allowances and numerous other "schemes."
In another practice that's become widespread in the industry, a vendor reportedly bought all of the marked-down torchieres from Linens 'n Things and replaced them, essentially "buying" the business and locking in its goods for a period of time. Vendors on the losing end of the deal were particularly soured by that action.
Both retailers received low marks for the extensive experimentation and testing they conduct on new goods. For suppliers, this not only costs more to do short runs of products, but poses fulfillment problems if the item is a big hit.
Bed Bath & Beyond does test, "but they work really hard with vendors to find what they feel is the right item and you work together to get to the right price," one home decor executive said. "They're confident and have a good handle on their customers."
Caption(s): Left: Bed Bath & Beyond's strong floor lamp mix includes mica, bronze and brushed steel models. / Right: The mix-and-match program at Bed Bath & Beyond is set up for volume selling. / Left: Linens 'n Things recently put novelty neon lights on an endcap. / Right: Cross-merchandising with fashion bedding, Linens 'n Things is making major statements in natural material lamps by designer Nate Berkus.
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|Comment:||LIGHTING FIXTURES; BED BATH & BEYOND AND LINENS 'N THINGS MAY LOOK ALIKE BUT THEIR METHODS DIFFER SIGNIFICANTLY.|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Nov 14, 2005|
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