Inside the category: Accent on decorative accessories

Global Views

There’s a lot to like about the state of decorative accessories as we enter the home stretch of 2019.

While many of these items are produced in China and therefore subject to the higher tariffs, they generally have smaller price tags at retail, so the hit at the register isn’t as great. Additionally, they help vendors and retailers hop on the fast track when it comes to trends. By extension, consumers can refresh their homes much easier with accessories versus replacing their case goods or upholstery.

Decorative accessories comprised the largest single category in HAT’s 2018 Universe Study, with 35% of the $69.58 billion home accents market. From 2017 to 2018, the category grew 4.5% (to $24.5 billion), outperforming the home accents universe’s 3.9% growth as a whole.

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Industry analyst Jerry Epperson (Mann, Armistead & Epperson) says accessories can take more risk when it comes to testing a trend, and they offer more flexibility when decorating. “Often it is the accessories that develop new themes, designs, colors, materials and scale that the more expensive furniture collections cannot or will not use until a theme becomes more recognized,” he told Home Accents Today. “In connection with this, the multi-described eclectic décor has become a huge separate category as consumers like to purchase signature items that can dress up a room rather than replace everything.”

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“Many of the décor items can be used in any room in the home, too,” Epperson continued. “Since the various décor specialist vendors have gotten deep into accessories and vice versa, the categories are almost impossible to separate. Why now? The retailers can invest in accessories and décor and update their showrooms and websites without making large changes in their regular lineups which would take more time and investment.”

Here’s what a few of those “specialist vendors” have to say about how the category is performing, the effect of tariffs, and their outlook for the months ahead.

ELK Home

How is your accessories category performing year to date?

Chris De La Guardia, senior vice president accessories, Ashley Furniture: We’ve experienced continued growth due to several new introductions that have addressed the needs of our customers, and the addition of category items they’ve asked for. We’re staying on top of the trends that make most sense and delivering incredible values for the industry.

Jason Mulvene, president, Blue Ocean Traders: We are currently having our best year to date. Decorative accessories have remained strong for us as we have focused on uniqueness. Our best-selling accessory lines are those that do not show or shop well on major online retailers. We continue to focus on vintage, handmade and minerals that show exceptional value and hand feel.

Bryan Williams, EVP, Crestview Collection: Crestview is growing in the decorative accessory category — increasing the number of SKUs and broadening the scope of our existing selection with the addition of new materials, sizes, multiple functions, etc. This has accelerated our growth in the category and is fueling the other categories as well. All customers strive to tell a complete story with their product offering, and adding more to this category has been a win-win.

David Pamer, CEO, ELK Group International: It’s been an uneven environment due to uncertainty, however overall positive. The year started off reasonably stable, despite the tariff implementation in late 2018. As we moved into late Q1 and Q2, we saw additional headwinds — largely tariff-driven — and overall marketplace uncertainty.  The positive is that customers continue to exhibit traditional purchase patterns of adding new product reflective of current styles and trends to their store assortments. I think we are all waiting to see if market demand remains in place from a purchasing activity perspective. The early returns have been favorable.

David Gebhart, CEO, Global Views: Business has been somewhat soft in 2019. We have to work hard to maintain the status quo when it comes to volume performance.  I attribute this to several factors — additional competition, uncertainty in the overall market for medium- to upper-end home décor, and the many ways customers can place orders. Never before have buyers for our goods had so many options on how and when they choose to buy products. I also believe we have seen a thinning of the herd of good-to-great retail organizations — in the past, many of these were our “Steady Eddie” customers.

Ashley Furniture

What kind of impact are the Chinese tariffs having?

De La Guardia, Ashley: The tariffs will definitely impact the industry. We saw this coming last year and made strategic moves to ensure a steady flow of production in other countries. This approach has positioned us to not react, but rather to be proactive to continue providing best services and value to the customer.

Mulvene, Blue Ocean Traders: We do very little of our accessory development in China. We have many more accessories from Eastern Europe, and our mineral lines from Madagascar and Brazil have been doing well. We actually have no tariff-related price increases for this season.

Williams, Crestview: The tariff dialogue alone is distracting — the effect is no different than price increases in the past. Crestview will source globally as we have in the past to bring product with the best design, trend and style to our customers.  The market will always be the final decision-maker — as long as the product has value, it will succeed.

Pamer, ELK Group: The cumulative tariff of 25% that has been enacted in two parts over the last six months is an unprecedented increase both in size and timing of implementation. We have yet to see the full impact of these increased costs on buyer demand but we believe that, if it remains, it has the potential to weaken the current growth environment. ELK has absorbed some of the impact of the increase to help our customers and to maintain retail price points within a realistic value range. In addition, we are working to address supply chain uncertainty by resourcing and expanding capacity in countries other than China to better shelter ourselves from any future issues that may arise. An unanticipated benefit from expanding our search in other countries has been the discovery of new materials that increase options for us in the new product development process, and this is exciting.

Gebhart, Global Views: I believe there will be a mad scramble for importers and suppliers to journey across the globe looking for alternative sourcing opportunities — not just in decorative accessories, but in all categories of home décor. We have always worked with a diverse sourcing map, with no heavy dependence upon any single country or origin. We have great selling items from China — our own designs — that I am hoping can carry a higher wholesale price due to their design and quality.

Blue Ocean Traders

What accessories and trends are doing well at retail?

De La Guardia, Ashley: Trends are relevant to our success, but timing is key, along with value and putting the entire story together for an easy one-stop approach. We are seeing and hearing a lot about bold pops of color, larger scale items, softer wood tones and brass/gold tones.

Mulvene, Blue Ocean Traders: Unique items with patina and soul perform the best; products with texture that you can layer, and that offer good value and hand feel.

Williams, Crestview: Those that are trend right — accessories are accents that add to the look of the room, and they’re quickest and easiest way to update or revive a room’s look and feel. Also, functional — many of our newest introductions were clocks, bowls, containers, storage pieces, serveware, etc.

Pamer, Elk Group: Décor remains a competitive advantage for many brick-and-mortar retailers as many of the categories are not as frequently purchased online. This is due to a few reasons, including that many of these items are impulse buys and not planned purchases. Also, for lower price point accessories the shipping costs can be an outsized portion of the overall cost of the purchase for which brick-and-mortars gain pricing advantages.

Gebhart, Global Views: If you have unique, well-priced, high-quality and, most importantly, well-designed products in the decorative accessory assortment, those items are going to do well at retail. The quality, value, design, and deliverability are all there in these best-selling product categories. I would also say designs that are complex to source, design and get made to begin with are home runs for us. Not many decorative accessory wholesale companies will take the time to import components from various countries of origin and combine them to make the most unique items available in the marketplace.

Crestview Collection

What’s your outlook going forward?

De La Guardia, Ashley: Optimistic and robust. A steady dose of great supply chain, best styles and service are key, and we feel we have addressed these points and will continue to do so.

Mulvene, Blue Ocean Traders: Cautiously optimistic. Although there may be some storms on the global horizon, we think our product line is well-suited for a tumultuous market.

Williams, Crestview: Our outlook is bright. Due to the increased emphasis in the area we are expecting large growth numbers as well as tremendous customer satisfaction.

Pamer, ELK Group: Cautious to cautiously optimistic, due to the current uncertainty and tariff-driven environment.  We are planning growth for Q3 and Q4 based on current trend rates … and activities we are working on from a product and supply chain perspective that will benefit the growth of our company in the future.

Gebhart, Global Views: I remain cautiously optimistic that we will see an uptick in business in the last half of 2019 — which I feel will continue into 2020. October High Point is going to be very strong for us with the new products we have staged for introductions from now until the end of 2019. New and amazing products drive optimism and sales.

See the portfolio of decorative accessories

Thomas Lester is Business Editor for Home Accents Today. A graduate of Emory & Henry College’s Mass Communications program, Lester spent a dozen years working for newspapers in Virginia and North Carolina covering an array of subjects, ranging from community news, government, education, ACC sports and more before joining Progressive Business Media in 2013. As business editor, Lester covers all aspects of business in the home accents world, from the latest news from manufacturers to successful retail strategies and business analysis.

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