AFTER BATH SHAKEOUT, RETAILERS ARE CLEANING HOUSE
Byline: FAYE BROOKMAN
NEW YORK — The mass market’s specialty bath category is not booming as it once was, but retailers are convinced they can keep sales afloat — albeit with many structural changes.
After several years of high-double-digit growth, last year the category grew by around 10 percent, reaching a retail volume of $80 million, according to industry estimates.
Mass market retailers attribute the relative decline to the proliferation of products flooding the mass bath market this past year.
“It seems every company in the world now has a bath item,” said Naomi Germano, buyer for Harmon Discount Stores in Cedar Grove, N.J. On top of that, consumer demand for bath items isn’t as high as many industry experts had originally predicted. In fact, the category has turned out to be much more of a seasonal niche than a year-round concept.
As a result, merchants noted, many stores are now stuck with bloated inventories and unproductive bath departments.
In jumping onto the early bath bandwagon, chains such as Thrift Drug in Pittsburgh and Thrifty PayLess in Wilsonville, Ore., carved out huge departments to stock a full array of specialty items. But now many buyers feel it is hard to get sufficient sales productivity per square foot.
In addition, stores like The Body Shop and mass merchandisers aren’t the drugstores’ only competition anymore. Even supermarkets are getting into the act and have started to enlarge their bath departments with specialty items, in addition to commodity body cleansers like Ivory or Jergens.
With these changes in mind, retailers are expressing the concern that the expansion heyday of the business is over. “People only take so many baths,” said Gregg Heller, buyer for May’s Drug Stores in Tulsa, Okla. Added Gail Jinks, buyer for Powell Ohio’s Drug Emporium, “We see a real move to bath as a gift purchase during seasons like Christmas.” Retailers such as Target, based in Minneapolis, and Duane Reade of Long Island City, N.Y., for the most part are sticking to commodity bath items and just cherry-picking from one or two gift-oriented bath lines. Many merchants noted that they are cutting out other lines; among those mentioned were Caswell-Massey II and San Francisco Soap Company. Wal-Mart Stores of Bentonville, Ark., has stopped carrying high-end bath products such as Elizabeth Arden’s Spa line, according to sources familiar with Wal-Mart, which would not comment on its bath strategy. “The expensive bath items never did fly. People just don’t want to spend the money,” the source said. Thrifty PayLess has scaled back from elaborate bath boutiques to a smaller presentation of its bath merchandise situated near beauty. Meanwhile, Duane Reade has removed its mini-boutiques from the two stores where it was testing the concept. The installations had featured products from the Nature’s Elements collection. CVS pared downed its number of sku’s of Freeman, Vaurnet and Fruit of the Earth to make room for its own bath line, called Down to Earth. May’s Drug Stores in Tulsa, Okla., is phasing out some higher-end products like Caswell-Massey II to focus on commodity products like bubble bath, Heller said.
“The turns just aren’t there,” he added. “We do better with more moderate prices, like Freeman’s Beautiful Bath.” Mark Kaplan, president of Sarah Michaels, one of the pioneers of the mass bath business, agreed there has been a shakeout. Only a handful of lines have survived, out of the many hopefuls who populated the category only a couple of years ago. “The bath category as we know it is over,” he said, referring to the explosive growth his firm and others enjoyed in the early Nineties.
Naturistics continues to be a major player in the bath business, which buyers attributed in part to the firm’s in-store fixture program. “We can help retailers make a statement about bath in the store,” said William McMenemy, executive vice president of marketing of Del Laboratories, the Farmingdale, N.Y.-based firm, which runs the Naturistics business. Another brand that has staying power is Yardley, buyers said. They noted that the collection has greatly benefited from last year’s decision to slash prices by 20 percent. Some retailers, however, said that even though they are looking to trim their bath inventories, they are still seeking niche bath products to differentiate their stores from the growing array of retailers who also sell bath items.
“In the beginning, Naturistics or Yardley were enough for us to sell,” said Jay Kessler, president of Ark Drugs in Mt. Vernon, N.Y. “Now we’ve had to go upscale.”
Steve Eckert, vice president of sales for the Indispensibles Division of Windstar, which distributes the Beaute line, agreed that the glass-encased bath products are providing growth for mass marketers. “The business has become polarized with the inexpensive items on one end, and products like ours at the other end,” he noted. “There are a lot of players fighting it out at that $1.99 price point.” Windstar’s Body Beaute line is also carried by CVS, Woonsocket, R.I., Eckerd Drug in Clearwater, Fla., and Caldor in Norwalk, Conn. Gail Jinks, buyer for Drug Emporium, selected a program from Toronto-based Globalux for Christmas. “I liked what they had to offer and the specialized way they put it together for us,” she said. Steve Lund, category manager for F&M Distributors, said that bath accessories — like loofahs and sponges — are another profitable part of the mass bath category and in many cases are outperforming bath gels and lotions.
Joey Wilmsen, national sales manager for Schroeder & Tremayne of Fenton, Mo., agreed that accessories are growing as gel sales slow down.
“We’re getting great interest from our massagers and our mesh sponges,” she said. Mesh sponges have been a bestseller for Schroeder & Tremayne’s Lady Elizabeth line because the sponges work well with body washes, she added. While many chains reduce the size and scope of the bath department, a few are still committed to making a bigger statement. Rite Aid has doubled its bath category and now carries lines such as Vitabath and Yardley. “We see opportunity in showing customers we have a bigger selection of beauty items, including bath,” said Martin Grass, chairman of the Camphill, Pa.-based chain. Phar-Mor of Youngstown, Ohio, is also expanding its offerings to include a larger selection of bath items. To promote impulse-driven sales, according to the store, gift items are merchandised outside of the beauty department in the area of the store that sells greeting cards, according to June Taylor, vice president of cosmetics.
Happy Harry’s in Newark, Del., recently installed bath boutiques that buyer Valerie Cheyney said have affected sales. “Before this, customers didn’t know the variety of bath items we had,” she noted.