Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=114093
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Going out pales next to staying home this spring

by Leslie Patton and Deb Weinstein
Feb 04, 2009


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Deb Weinstein/MEDILL

Green vases herald spring and offer comfort at Crate&Barrel on West North Avenue.

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Deb Weinstein/MEDILL

Windows promise new color at the West North Avenue Pottery Barn.

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Leslie Patton/MEDILL

Spring colors at the Land of Nod on West North Avene are muted, matching the economic mood.

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Deb Weinstein/MEDILL

Color comes in many sizes and prices at Crate&Barrel.

Enveloping customers in comfort is not a new tactic for home goods retailers.  For spring, however, the color palette is taking on a distinctive look reflecting consumers’ desire to create a more soothing environment as they cut costs and spend more time at home.

According the Bureau of Economic Analysis, in December personal income decreased $25.3 billion, or 0.2 percent, and disposable personal income, the money left after paying for utility bills and necessities, fell $25.1 billion or 0.2 percent.

Edward J. Fox, director of the JCPenney Center for Retail Excellence at Southern Methodist University in Dallas, said time at home fills several needs.

“People are staying home and staying close to their families. People are nesting, or cocooning,” he said. "The entertainment dollar goes further in the home.”

Home goods trends mirror these needs in both price and color scheme.

“We’re looking at a lot of warm and natural colors…comfort colors,” said Pamela Graves, editorial director of Chicago-based HomeFashion magazine, a publication of Talcott Communications Corp. People are staying home and entertaining more and want to be comfortable, she said.

“Our pinks have changed: brighter pinks to a little more subdued,” said Meredith Dostal, store manager at The Land of Nod, owned by Hamburg-based Otto GmbH & Co KG, on West North Avenue. Motioning towards a pink and green bed with frilled accent pillows, she noted that it was a near-replica of last year’s bedding. But, like the economy, was a paler version of its former self.

Graves said this spring is all about subtle touches.

It is also about people focusing on what they really want, rather than buying items because they are available, said Aaron Britt, editor at Dwell magazine.

"I think we're coming out of the era we've been in of get it cheap, get it fast,” he said.

Brittany Strickland, 22, is one of those consumers who are not wholly sold on a bargain.

Looking at a vintage-inspired pattern at specialty retailer Crate&Barrel, owned by Hamburg-based Otto GmbH & Co KG, Strickland said she liked the chair, but it wasn’t plush enough.

She was looking for a “big, cozy chair,” she said. Crate&Barrel was the third stop on her circuit, which included the privately owned Z Gallerie Inc. and Restoration Hardware Inc. down the street. Restoration Hardware was acquired for $175 million by private equity firms Catterton Partners and Tower Three Partners LLC in 2008.

Even Ikea Systems BV., known for its trendy, low-price items, has noted new buying patterns. “Consumers are definitely more budget conscious now,” said Mona Liss, public relations director.

Liss said that there’s been an uptick in sales of kitchen fixtures and home organizing goods. Shelving for home entertainment systems is also on the rise.

At the Pottery Barn on West North Avenue, though, spring looks different, in several ways.

Reflecting the company’s push to move out holdover inventory as well as to welcome a new buying season, the store on Wednesday was a mix of new products and old merchandise. One part of the first floor reflected the “A Fresh Start” message on the store’s windows with walls painted a dandelion yellow, this season’s color for the chain. The other part of the floor was heavy with holiday clearance, including shellacked trees and holly wreaths marked 50 percent to 75 percent off.

Discounts continued upstairs, on items such as bathrobes and furniture.

The company reported a net loss of $11 million for the quarter ended Nov. 2, compared with a $21.7 million profit in the year-earlier period.

To stem the bleeding, parent company Williams-Sonoma has focused on clearing out inventory, which is now expected to be down 10 percent to 14 percent, compared with previous guidance of only 5 percent to 10 percent off, according to a research note from David Magee, SunTrust Robinson Humphrey Inc. managing director. A reduction in inventory is “a positive for margins, but a potential negative for top-line momentum, particularly given the consumer’s current value orientation,” he wrote. 

Despite a shrinking gross domestic product, estimated to have dropped 3.8 percent in the fourth quarter, chasing a third quarter drop of 0.5 percent, retail expert Fox said the lower prices may be an entry for “aspirational shoppers,” people who want to be associated with the brand and frequently buy sale and clearance items.

Dwell’s Britt said buying little things also makes sense. Consumers still desire that “feeling of newness,” he said. “Rather than tear out the kitchen, people will be far more likely to make smaller purchases.”