SPECIALTY RETAILERS AND MASS MERCHANTS

For Loui Michel, brand-names-for-less apparel retailers such as Marshalls and Ross Stores have become important customers. (T.J. Maxx is another retailer of this kind mentioned by frame vendors.) “Specialty retailers and mass merchants are the ones who are growing the business,” Block contends.

“Most people are shopping at off-price retailers.”

Fabric chains are reportedly looking to expand in home decor because the fabric business is down@ trending. Among those mentioned by frame vendors are Jo-Ann Fabrics, Fabric Bonanza and House of Fabrics.

In addition, Nick Lazaris, president of M.W. Carr, says he sees an upswing in frame sales in the photo channel, a view seconded by Joe Schriver of Burnes.

Meanwhile, the category-leading mass merchant channel (31 percent market share) has enjoyed a strong year in frames, with Kmart rebounding from a difficult 1993 that saw it reduce its store count by some 450 units (nearly 10 percent of its total) and with Wal-Mart and Target continuing to increase sales and store totals. Caldor, Venture and ShopKo have also been increasing their store counts.

“In 1994, Kmart has returned aggressively,” one vendor comments. “In 1993, they were struggling big time in frames. Now, they’re beginning to regain share from Target and Wal-Mart and some specialty retailers. Their assortment and attitude have both improved.”

Decorel’s Scheyer observes that the big three mass merchants devote 35 to 40 feet on average to photo frames, and “there are not too many categories, other than RTA furniture, which get that type of footage.”

Jamesway is another mass merchant whose frame business has rebounded strongly in 1994, posting an 11 to 12 percent increase after being flat in 1993.

Like chain drug stores, their closest competitors in the frame business, department stores (18 percent market share) are not counting on additional stores for sales growth but on greater efficiency and better merchandising (see merchandising story). Carr’s Lazaris says he is pleased that department stores are improving their operational systems.

“Those that have survived are stronger. The shakeout is over. Department stores now have an opportunity for renewed growth in frames,” Lazaris believes. “A year or two down the road, I see the upscale market growing again.”

“Some major department store players have targeted stationery/frames as a growth area,” notes Giron of Fetco. Overall, Giron believes that “department stores continue to hold their own” in the frame business.

“Although the bed and bath stores do extremely well in frames, we still find that the largest volume channel is department stores,” reports Schriver of Burnes. “They have the highest unit sales per rooftop of the stores we serve.”

Drug stores (16 percent market share) rank just behind department stores and may have the potential to overtake them because, large as their share of the frame market is, it is well below their share of the closely related photoprocessing market.

Drug stores had a 24.8 percent share of photoprocessing sales dollars in 1993, according to the Photo Marketing Association – second only to minilab outlets, which had a 25.5 percent share. Mass merchants, by contrast, had only a 15.9 percent share. In terms of rolls processed, drug stores were the number-one channel, with a 26.5 percent share. (One frame channel that has capitalized much less than drug stores on a large photoprocessing share is supermarkets.)

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