Retailers try to find a pot of gold in upper-end juvenile housewares - discount store retailers

Discount Store News, Nov 21, 1988 by Mary Ellen Kelly

Retailers Try to Find a Pot of Gold In Upper-End Juvenile Housewares

The children of discount store shoppers could one day have silver spoons in their mouths. Department stores are losing their footing in the juvenile housewares category and opportunities are opening upsfor other retailers. Catalog showroom shoppers are already spooning baby food with gold-plated infant utensils from bone china dishes.

Whether the spoons, cups and bowls are made of silver, plastic or pewter, discounters and catalogers say the bottom line is gold, as long as buyers do not get trapped with excess inventory by offering too broad a range of product.

Some Discounters Hesitant

Some discounters overextended sku and floor space commitments to the category in the past two years and are now hesitant to embellish their basic assortments of plastic and stainless steel pieces. Whether consumer acceptance of high prices will tempt discounters to dabble in what is becoming a lucrative business for catalogers remains to be seen.

K mart and Ames, for instance, are not yet selling juvenile housewares items at all, according to company spokesmen. But vendors such as Towle Silversmiths, Newburyport, Mass., are confident that distribution through discount channels will become more numerous as retailers realize the volume and profit potential the category offers.

"We're working on a display system for discounters right now," said James Leonard, vice president, international sales, export at Towle. "Higher price points don't scare people off in this category. It's a gift purchase with measurable value. You can look up silver in the newspaper and see what it's trading at," he added.

Brisk Sales at Catalogers

Catalog showroom operators such as Service Merchandise and Best Products have not experienced problems in sell-through and are upscaling to Royal Daulton bone chinae place settings for children, priced at about $30.

Service Merchandise, based in Nashville, Tenn., is now selling gold-plated cutlery and cups priced between $13 and $20. Two catalogers have done so well with the category they are currently negotiating with Towle for two juvenile silver patterns that will be exclusive to each of their showrooms.

Overall, catalogers are exploiting the gift potential of juvenile housewares products, merchandising juvenile housewares items primarily in the giftware department. Discounters, who do not have the manpower or security to safeguard the more costly sku, position selections in either the infants or housewares departments as a mother's purchase item. The potential to sell silver and china through upscale discount outlets could be realized if manufacturers develop merchandising and packaging systems which would make theft difficult.

A spokeswoman for Richmond, Va.-based Best Products, Brenda Humphrey, said juvenile housewares and gift items are definitely a "growth area." The chain plans to upgrade assortments next year including, perhaps, a deeper presentation of silver items as well as new crystal serving pieces and picture frames.

Best's plans for 1989 include finding a way to "merchandise juvenile gift items in a location closer to our baby goods department," Humphrey said. Whether this will mean moving the selections out of giftware and into baby goods, or positioning the two departments closer to each other in the showroom, or some other approach was not disclosed.

Fred Liddle, national sales manager of housewares and mass markets at Oneida Silversmiths, Oneida, N.Y., said discounters and drug store chains are the primary growth channel for the company. "Sales through the mass market doubled this year and we expect a 50 percent growth rate through 1989," he said.

Oneida manufactures silver plated, plastic and stainless steel juvenile items, selling the latter two to discounters. Business with catalogers is primarily in higher-ticket silver-plated merchandise.

David Goldstein, product manager at vendor Kiddie Products, Avon, Mass., said sales of juvenile housewares items through discount outlets were up 15 percent between 1987 and 1988. He forecast a 10 percent ot 11 percent volume increase next year.

Jim Mills, president of JMP-Newcor Corp., Northbrook, Ill., noted that "retailers have pulled back from the category somewhat," because a glut of new product offerings in the past year or two caused some retailers to overextend their sku commitments. Newcor manufactures Sesame Street licensed juvenile housewares and non-licensed pieces.

While some discounters are wary of excess inventory, customers are not troubled by the higher price points, even when the piece is not a gift item. "Housewares-type items represent a small percentage of sales, but it's where I can make my profits because customers don't price shop for these items," said Tom O'Hara, buyer for Secaucus, N.J.-based Jamesway.