October 5, 2011,
By David Gill
Speaking of his first months on the job, Norm Savaria, who became president and CEO of WestPoint Home in June, characterized this period as "managing a lot of change."
Savaria, who worked for WestPoint in the 1980s before joining Revman, succeeded John Piazza, who himself succeeded Joe Pennachio in 2008. Chernin-- whose career includes home-fashion, product-development, private-label and global-sourcing positions with Bloomingdale's and Linens 'n Things--will now apply her expertise on the vendor side of the business.
Savaria and Chernin are in the top spots of a big home textiles company that used to be much bigger. Once accounting for about $2 billion in annual sales, WestPoint Home has seen its top line sag since the beginning of the century. Its sales in 2010 totaled $429 million, less than half its sales for 2006. The bleeding has continued into this year; for the first half of 2011, sales took a 24 percent dive. The bottom line has been consistently red as well, with net losses in every fiscal year since Icahn Enterprises acquired the company in 2005.
Speaking to HFN, Savaria and Chernin said their first moves were to visit WestPoint's manufacturing facilities and retail customers. Then they set to work in constructing a strategic plan for the company.
"We are addressing this in two ways," Savaria said. "We need to concentrate on our core fundamental strengths, including our state-of-the-art manufacturing in countries that make sense and our people who have the knowledge and expertise we need. We need to expand our manufacturing capacity in existing and possibly new facilities. We also need to focus on what I call the 'fuel' side of the business, which consists of product and innovation."
The strategic plan also should address what lies in the road ahead, according to Chernin. "We need to build a culture focused on the future," she said. "We also need to focus on the end consumer. We need to develop products that help peoples' lives, that help them become more fashionable in their homes."
Both executives look upon the future as loaded with opportunities for WestPoint Home, and one of those opportunities is in expanding its business with its current customers. "We feel we can be a big sheet supplier to retailers where we are already big towel suppliers, for example," Savaria said, "or be a bigger basic-bedding supplier where we are already a big sheet supplier. We have to persuade our retailers that there are efficiencies in working with a one-stop resource, and that we believe we can be that for them."
Another opportunity is in restoring WestPoint's good name as a fashion resource for the home. "We have added significantly to our design staff since we've been here," Chernin said. "We have also done deep dives into lifestyles. We have a broad consumer base, but we will edit our looks down."
Reestablishing WestPoint as a fashion provider is a particular challenge, given the change in its relationship with Ralph Lauren. Late last year, Polo Ralph Lauren and WestPoint announced that the designer brand would bring all of its sourcing for the home line in house, ending a license relationship between the two companies of 29 years. Savaria noted that WestPoint still manufactures decorative bedding for the brand, although it no longer has the license, and that WestPoint still holds the Ralph Lauren license in basic bedding.
Even without Ralph Lauren, according to Chernin, WestPoint still has a stable of reliable brands. "Consumer studies show that Martex, Patrician, Utica and Lady Pepperell still have good recognition," she said. "We also have a core commitment to the WestPoint Home brand, and we are still committed to our Hanes, Joe Caribbean and Izod licenses."
Bringing all of its advantages to the fore was a key strategy for WestPoint during last month's New York Home Fashions Market. "We wanted to present what's exciting about us," Chernin said. "The merchants and buyers should understand our core, which is that we are classification experts in sheets, towels and utility bedding. They should also understand our private-label capabilities."
The road ahead will continue to present challenges, according to Savaria. "I think we'll see choppy sales results through the spring of next year," he said. "By next fall, we'll see stability."