But Imports Make U.S. Firms Less Merry : Baby Boomers Spur Tree-Trimming Sales
As Christmas lights twinkle inside and out today and fragrant pine and floral scents waft through gaily decorated homes, think of all the green spent on those festive holiday decorations.
Christmas cheer adds up to a billion-dollar business for the trim-a-home industry--which is enjoying renewed prosperity thanks to baby boomers, cheap imports and more home entertaining these days. Today’s holiday decorators have gone far beyond those fragile shining Christmas ornaments.
When it comes to decking out the house for Christmas, many think nothing of shelling out hundreds of dollars for artificial Christmas trees, animated angels and snowmen, fresh poinsettias, wreaths and other holiday greens.
Worth $1.5 Billion
The holiday trim-a-home business is worth about $1.5 billion at retail and is growing, according to Kurt Shindler of Dudwick, Shindler Associates, a New York-based sales representative for 20 manufacturers of Christmas items. He expects industrywide sales to be up 5% to 10% this year.
But it has taken the industry more than than a decade to recover from 1973, when President Richard M. Nixon asked Americans to reduce their use of outdoor lighting, particularly Christmas lights, to help save energy during the first major oil crisis.
“It killed the industry, not just my merchandise but Christmas in general,” recalled Jim McCarrick, New York sales manager for Empire of Carolina, the largest U.S. maker of outdoor Christmas decorative items. “Since 1980, the whole trim-a-home business has been coming back.”
H. Michael Hecht, chairman and chief executive of the Broadway, said sales of Christmas motif items--whether crystal, table linen, housewares or decorations--have been “outstanding.” Retailers attribute the renewed popularity of Christmas decorations to the baby-boom generation that is now settling down with young families of their own. “They’re hearkening back to their youth. In our youth, Mom and Dad decorated the tree, put stuff on the front lawn. Now they go into stores and want to do the same thing,” said McCarrick at Empire of Carolina.
Foreign Competition
“The younger generation that is coming up is willing to climb back on the roof to decorate,” quipped Syd Kahn of Kahn & Comings, a Los Angeles-based a sales representative for makers of Christmas decorations.
But the comeback has not been all that merry for U.S. producers of Christmas decorations. Foreign imports account for virtually all midget holiday lights, which have become more popular inside the home than the larger glass bulbs that are far more expensive to produce than the midget lights. In many cases, large volume retailers are ordering their lights and other decorations direct from foreign suppliers.
“This year, we’re probably selling more units, but the price is lower than a year ago,” said Bart Scott, vice president at J. Hofert Co. in Los Angeles, the only U.S. manufacturer of Christmas lights and glass ornaments in the West. “In volume and units we’re selling more of some items, but as far dollar volume increase, we don’t think it went up that greatly because prices are lower. We’re losing out to the Orient.”
The company imports midget light bulbs from Asia but produces the light strings in Los Angeles. “We used to employ 75 to 80 people to make sets for 10 1/2 months out of the year,” said Scott. “Now, we work only seven months with 20 employees.”
U.S. manufacturers, however, continue to command the market for large decorative items like lighted, plastic molded Christmas figures of such old favorites as Santa Claus, which range from 13 inches high to two feet. These items are becoming increasingly popular as evidenced by Empire of Carolina, the largest maker of these items, whose Christmas business alone is up 30% from last year, according to McCarrick.
Santa Is Bulky
He said the company has managed to stay clear of foreign competition because freight costs make it prohibitive to import the goods. “Our merchandise is too big, too bulky. Shipping a Santa, excuse the expression, is like shipping a coffin.”
It is the larger, more expensive items that are fueling the spurt in trim-a-home items. “We’re finding the higher-priced items are selling significantly better than lower-priced items,” said Larry Palant, vice president at Christmas Eve Inc., a New York sales representative that specializes in Christmas decorative items. “Customers are generally stepping up.”
Items, Palant says, like artificial trees that retail for $200 to $300, or individual tree ornaments selling for $5 to $15 a piece. Or, the so-called collectible tree decorations such as a series of Santa Claus ornaments based on turn-of-the-century chocolate molds that sell from $4 to $8 each.
Pricey Dolls
Another major item factor are two-foot-high animated characters whose heads or hands move. The dolls sell for anywhere from $66 to $140 each. “They are one of the hottest categories in the Christmas decoration field,” says Shindler of Dudwick, Shindler Associates.
Some old-fashioned decorations also are making a comeback-- like bubble lights, the little vials filled with colored liquid that bubble when they heat up. Their renewed popularity--they were big in the 1950s--is keeping manufacturers like Beacon Electric of Boston busy.
In addition, Christmas decorations sellers are drumming up interest in the decorating with some clever marketing ideas. Christmas Eve Inc., for example, has what it calls “concept Christmas,” whereby holiday decorating has a coordinated look of tree skirts matching ribbon or gift wrap. “It’s like Better Homes & Gardens coordinates a room,” explained Palant.
Personal Flowers
Paul Ecke Poinsettia Ranch in Encinitas, the world’s largest supplier of cuttings of the Christmas plant, introduced some product innovations like “personal poinsettias,” small individual plants grown in tiny plastic bases with self-watering wicks.
Jeff Sholl, vice president for marketing, said the grower also added small, 4-inch baskets to its traditional line of 8- to 10-inch baskets. “It was a great success even before Thanksgiving,” said Sholl, who added that “we’ve had an outstanding year.” Other floral items popular this year were fresh wreaths and garlands.
Suppliers already are working on decorations for next year. Palant at Christmas Eve Inc. said he expects scent pots to be big next year. If so, homes next year might be filled with the smells of bayberry, pine, eggnog and even hot bubbling apple pie.
