Silk flower sales in full bloom; craft, specialty stores vie with discounters for dominance

Discount Store News, March 26, 1990 by Mary Ellen Kelly

Silk Flower Sales in Full Bloom

Craft, Specialty Stores Vie With Discounters for Dominance

Discounters are currently the No. 1 channel in sales of artificial silk flowers and plants, based on the latest study conducted by the Hobby Industry of America. But the explosive growth of craft and silk flower specialty stores--both discount and full priced--is threatening that dominance.

Too narrow an assortment of silk flowers, artificial plants and accessories at full-line discount department stores could open the way for new specialty competitors to seriously erode this profitable business.

The shift by Chicago-based Ben Franklin and San Antonio, Texas-based Winn's toward discount craft stores and away from their variety store roots signal an avenue that others might soon take.

Crafts & More, the specialty store division of Ames Department Stores, is flourishing--rapid unit and sales growth are being generated by both freestanding units and those housed within the Ames discount department store. About a half dozen pillars of silk flower stems are positioned at the very front of the store in most of the specialty outlets and are a significant sales and profits contributor.

But the competition does not end with discount and full-priced specialty stores. Home centers, drug stores and supermarkets are also tapping into this lucrative home decor category. Montgomery Ward, which had been leasing 73 silk flower and plant departments to a chain called Silk Plants, Etc., has recently decided to take over operations of that department. The last of the Montgomery Ward Silk Plants, Etc.-run departments was scheduled to close on March 15.

(Silk Plants, Etc., is a 61-unit upper-end chain. Both this chain and Pouliot, an importer of high quality wood trunk trees and custom floral arrangements, were acquired on Jan. 1, 1990 by Foliage Plus, a newly formed vertical company.)

Typical of many full-line discount chains is Fisher's Big Wheel. The Pennsylvania-based discounter's sales of silk plants were up in excess of 50 percent between 1988 and 1989, according to Carl Schwartz, vice president, general merchandise manager, hard lines. The category is expected to surge an additional 20 percent to 25 percent during 1990.

"The category has grown so much because we devote a lot of main aisle space to it," Schwartz noted. "We promote the plants nearly 10 months out of the year. It is a very profitable category for us." The basic silk flower business has not grown much during the past few years, but promotional plant sales "have developed beyond our expectations," he said.

While competitors like K mart and Ames are also aggressive in the category, Fisher's promotes silk plants more frequently than these two chains, said Schwartz. The everyday assortment of silk flowers runs between 12 feet and 16 feet.

Sales, Price Points Climb

Regardless of where the purchases are being made, colors echoing those popular in home fashions are dominating sales. While some manufacturers believe that life-like product is a primary concern for a portion of their customers, the majority assert that "botanically correct" is no longer the driving force. Black, sea foam green and slate blue--while rarely, if ever, found in nature--are the hot new colors, according to executives from top suppliers.

What vendors do agree on is that retailers and consumers are willing to trade-up to higher price points and better quality products. All acknowledge too that silk flowers and plants are no longer a seasonal purchase. While sales peak during certain holidays like Memorial Day, the category generates a solid everyday sales level.

James Kropp, marketing manager with Teters, Bolivar, Mo., said the company has found the market receptive to $1.99 to 2.99 handwrapped flowers. Less than a year ago, the market accepted flowers priced 69 cents to 99 cents. Similarly, receptiveness to better grade bush flowers have let price points soar to $4.99 from $1.99.

Teters is also currently testing bushes priced between $7.99 to $9.99 to determine whether additional trade-ups are possible. Teters enjoyed an 18 percent sales increase between 1988 and 1989; double-digit increases are forecasted for 1990.

David Clapp, president of Magic Designs, and vice president of its parent company, Designer Accents, said the company generated a 25 percent sales growth increase between 1988 and 1989; the same percentage rise in business is projected for 1990.

Magic Designs targets the pre-made floral market. Floral arrangements are priced to retail from $10 to $35. All products are imported, primarily from China, Taiwan and the Philippines.

According to Clapp, the two areas of product development that are of greatest importance are: * Integratable colors that work in concert with current home fashion trends; * Addressing consumer demand for botanically correct blossoms and foliage.

Ira Kleinberg, president of New York-based Reliance Trading, makers of Beauty Silk, Beauty Craft and Beauty Basket foliage, flowers and accessories, said sales between 1988 and 1989 were up 14 percent. Projected increases for 1990 are 23 percent. Kleinberg, who also sees a receptiveness to higher-quality goods, sees two distinct consumer groups that shop the category.