IKEA, The Home Depot and Bed Bath & Beyond are the three largest retail giants in the home textile products segment and if their sales and growth projectiles are any indication, then the segment is poised for better days ahead. In addition to these three major retailers, even the home division of JCPenney, which has been struggling to retain its customer base, saw positive growth which further points to an optimistic scenario in the home segment. Though, total sale or net profit of few of them has decreased, the common thread between all is the positivity they have claimed for future business and their initiative for growth.
IKEA continues to impress
With 315 stores in 27 markets, and operations in 42 countries, the IKEA group is going from strength to strength. In the last fi scal there were 700 million visitors at its stores which is an increase of 4.7% over the previous year, while their website registered more than 1.5 billion visitors with a sales increase of 5.9% (adjusted for currency impact) from last year to 28.7 billion. In last fi scal it saw growth in all sales channels: existing stores, the opening of new stores and online.
With its product mix and affordable home offerings, the retailer gained market share in almost all markets and also entered a new country, Croatia, in 2014. The company opened 12 new stores in 10 markets. IKEA is not only increasing its expanse in traditional retail, but has now expanded its online shopping to 13 markets; the strategy is to roll out online availability to all markets over the next few years. The fastest growing market for the IKEA Group was China, where increasing customer demand and new stores drove sales. The North America market remained healthy and Europe’s upward trend continued.
The group has 1,002 suppliers in 51 countries and is working on a longterm partnership strategy with its suppliers (on an average 11 years) which have worked very well for the retailer. In 2014, 100% of home furnishing suppliers for the retailer were approved to the IWAY (code of conduct for suppliers) standard, or were being phased out or pending a scheduled audit. IWAY ensures that it contributes to better lives of the workers and supports decent jobs throughout the supply chain.
The Home Depot: Net sales increase by 5.5% even after setback
Known as the world’s largest home improvement retailer, The Home Depot, operates a total of 2,269 retail stores in all 50 states of the US, the District of Columbia, Puerto Rico, US Virgin Islands, Guam, 10 Canadian provinces and Mexico. Though the fi scal 2014, ended 1st February 2015, saw some major upheavals with the sensational discovery of ‘Data Breach’ wherein its payment data systems had been infringed, forcing its Chairman and CEO, Frank Blake of over 7 years to step down from the CEO position, yet its business performed well. Highlights of the company’s Fiscal 2014 performance include the increased net sales by 5.5% to US $ 83.2 billion. “We had a strong fi nish to the year as strength across the store, the recovering US housing market and solid execution aided our business in 2014,” said Craig Menear, current Chairman, CEO and President of the company. The company is expecting net sales growth of approximately US $ 1 billion in Fiscal 2015.
Bed Bath & Beyond Inc.: Growing sales increasing stores
Bed Bath & Beyond Inc. is counted among the Fortune 500 and the Forbes 2000 companies and is also one of few companies that has grown continuously in the last fi ve years in its net sales and as well as in number of stores. Its net sales for fi scal 2014 were approximately US $ 11.881 billion, an increase of approximately 3.3% from net sales of approximately US $ 11.504 billion in fi scal 2013; its comparable sales for both fi scal 2014 and fi scal 2013 increased by approximately 2.4%.
In its last fi scal, ended on February 2015, the company had 1,513 stores. In addition to retail operations, it is also growing in its complementary institutional business – which includes subsidiaries Harbor Linen and T-Y Group. The company reported net earnings of US $ 957.5 million compared with US $ 1.022 billion in the full year of fi scal 2013. Looking forward to fi scal 2015 fi nancial model, the company is modelling a 2 to 3% increase for comparable sales for both the fi scal 2015 fi rst quarter and full year. The retailer also has a strong e-presence and operates websites at bedbathandbeyond. com, worldmarket.c om, buybuybaby.com, christmastreeshops.com and harmondiscount.com.
JCPenney home reduces loss; sales increased
The year 2014 was comparatively a successful year for JCPenney, and after men’s apparel, Home segment was the company’s top performing merchandise divisions. Approximately 1,060 stores and at jcpenney.com, JCPenney reduced its loss in the last fi scal with net loss of US $ 771 million in Fiscal January 31, 2015, compared to US $ 1,388 in Fiscal ended February 1, 2014. Its total sales increased 3.4% for the year and comparable store sales grew 4.4%. Its internet sales through jcpenney.com grew US $ 145 million to US $ 1.22 billion for the year, increasing 13.4% over last year. Building on the success of 2014, the company’s 2015 full year guidance claims that comparable store sales is expected to increase by another 3%.
In the home segment, the retailer expanded the Liz Claiborne collection to include a selection of bedding, bath and luggage to complement every home. Starting Spring 2015, its Liz Claiborne window coverings are also available with a classic array of curtains, drapes, valances and hardware. It also expanded in-store windows selection so that customers can easily shop and choose from curtains and drapes in an array of traditional and modern styles. With focus on private brands, it is extending private brand assortment along with sought-after national brands and more to ensure the selection of products fi t every need and budget.
Home Collections at JCPenney represents the largest category online and is a key driver of traffi c. It issued a 120-page home catalogue after overwhelming research confi rmed that customers prefer to browse a traditional printed piece before going online or to the store to purchase an item. This specialty home catalogue is one part of a larger, planned promotional mix designed to entice customers to shop with us throughout the year. Looking 2015 to 2017 as path to profi table growth Marvin Ellison, President and CEOdesignee said, “I believe 2015 will be an important year for JCPenney, and the team is focused on profi tably executing our business.”
