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Stacking up well.

NEW YORK -- Home organization and storage departments have been stellar performers in mass merchants this year, and the category shows no signs of slowing down in 1998.

Mass retailers report the category posted significant gains in 1997. Those gains, coupled with the category's healthy profit margins and consumers' willingness to pay higher prices for large units, have helped maintain forward momentum in the storage business.

"It continues to be a category of growth," said Mark Ramsdell, vice president of merchandising for Hills Stores. "The sizes of [storage products] seem to get bigger and bigger, but at this point in time, there has not been a big push back from the customer as the prices move up."

"We had a very strong year in storage," said Bob Muldoon, divisional merchandise manager for Bradlees.

Retailers say many products have contributed to the continued success of the storage market. Large-size products, rolling carts, clear frosted looks and colors have been the driving forces this year and will help propel the category in 1998.

"Large sizes seems to be the hot trend right now," Ramsdell said. "We keep showing it and the customer keeps buying it. It's an interesting concept, because we're finding that even in our home furnishings department, with wardrobes, etc., large sizes are what's happening." He attributed the move to larger units to consumes' cocooning habits. "Consumers are buying more products for their homes and therefore they have to store it."

"We've been able to do some good promotional things in the larger sizes," noted a buyer for a regional mass merchant. "The consumer has really responded well to the large sizes."

Sales of rolling carts are on the rise, too. In fact, according to Muldoon of Bradlees, gains in the rolling cart segment have offset some softness in the 18-and 20-gallon tote business.

"Carts are up there" in price, he said, putting their tags in the $30 range. "It's been a nice plastic story. I see that continuing in large sizes and carts, especially as more vendors are moving to carts that are multifunctional." He noted consumers can use them as dressers in bathrooms and closets, and in offices.

The infusion of color into storage has been a driving force in 1997, said Laura Mahle, spokeswoman for Kmart Corp. "A major change for Kmart's storage/ organization is our recent introduction of fashion colors. Cypress and Mystic Blue are two of the most successful colors."

"Clear is strong and still the basic color," Muldoon said, but "color definitely helps the business. It brings excitement to the category, to make the consumer more aware."

"Retailers are bullish about the category's prospects for 1998, especially as far as color, size and rolling units are concerned. I think you'll see more of a play on color, maybe even some play on textures in 1998," Ramsdell of Hills said. "When you think you've covered every function, [suppliers] seem to come up with more. I'm sure there will be more of a market segment for specific storage needs."

He said red and green storage items have been popular for the holidays, and perhaps orange and black units for Halloween will be big sellers in 1998 (see story on Halloween for housewares, page 39). "It's becoming more and more important of a holiday with parties and decor," he said, noting home office has even more potential in 1998.

The regional mass merchant buyer said large sizes will continue to be important, "but we will also see more innovative, multipurpose products. Color will also become more important."

Mahle of Kmart added, "Color will continue to be a key component of our merchandising mix."

Retailers said they will continue to upgrade and expand the category, especially by adding new vendors.

"We've already added players," Ramsdell said. "Just dealing with one vendor, obviously, you can't cover all the fashion ideas consumers have."

He added that while storage vendors are continually segmenting the market, offering units at higher prices, "the consumer at some point in time has to push back. It's possible that 1998 could be the year." But he doesn't expect that.
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Title Annotation:mass merchandiser sales of home storage products
Author:Bernard, Sharyn K.
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Date:Nov 10, 1997
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