Linens ‘N Things Brand Returns to Canadian Retailer
By
Tom Ryan
Home
Outfitters, a division of Hudson’s Bay Co., will sell a line of Linens
‘N Things branded goods at its 69 stores in Canada beginning next
spring. The home goods retailer shut its doors last year.
The
agreement, which includes a range of bed and bath, home decor and seasonal
products, extends through 2016 and is projected to generate in excess
of $100 million in retail sales over the term.
The
licensee agreement marks the re-emergence of the Linens ‘N Things
brand at store level since launching www.LNT.com early
this year.
“We
intend to build on and cultivate the vast following of the Linens ‘N
Things brand in Canada,” said Kerry Mader, senior vice president of
Hudson’s Bay, in a statement. “As a highly recognized and trusted brand
it will provide a quality and fashionable alternative ideally suited
for our customers.”
Linens
‘N Things, once the largest home goods retailer after Bed Bath & Beyond,
went out of business last year after it failed to find a buyer in bankruptcy.
At a bankruptcy auction in January, Gordon Brothers and Hilco Consumer
Capital won the rights to Linens ‘N Things’ intellectual property.
Gordon Brothers and Hilco also own brand rights to other defunct chains,
The Sharper Image and Bombay Co.
The
agreement comes as some other defunct store banners refuse to die.
Circuit City came back online as a pure e-retailer in May 2009. Montgomery
Ward returned online in January of this year. Sharper Image is now
selling its branded goods at Macy’s, Bed, Bath & Beyond and Kohl’s
as well as online.
Discussion
Questions: What do you
think of Linens ‘N Things coming back as a retail brand? Would you
like see other defunct retail names coming back as brands?
I would echo the same comments I made a few months ago, when BrainTrust panelists talked about the web-only “play” being made to keep the Linens ‘N Things name alive. By the time somebody attempts to revive the brand in the U.S., the damage has already been done to the brand because of the Chapter 11 filing and the sudden closing of hundreds of stores. Jump-starting the brand in the future assumes that desirable real estate is still available (maybe so). It also assumes that surviving competitors (from Bed Bath & Beyond to Kohl’s) haven’t absorbed all the market share (maybe not). Linens ‘N Things may have enough brand equity left to “start over” in Canada but it can expect rougher sledding in the U.S. if it tries to stage a revival.
I don’t think it has the brand equity to make it in retail and come up against names like Martha Stewart or other designer home goods names. Survival of the fittest!
However, you bring up an interesting question. How can defunct brands be revived and which one are candidates? I was watching one of my favorite shows–Mad Men–and they invoked the name Bonwit Teller, once one of the quintessential women’s apparel retailers; now a footnote in fashion history. But it still has a following. Makes you wonder whether iconic names like this could be revived at retail. Bonwit Teller for Wal-Mart?
Resurrecting a brand requires a strong strategic approach. Marshall Field’s Department Store, with a loyal Chicago base, and a Midwest following, could very well make it as an e-tailer, or specialty store. That department store brand may have passed its time–that’s an enormous shame, as it was one of the World’s great retailers.
Macy’s has the name. They are not likely to be the ones to resurrect it. The right entrepreneur would have to fashion the vision.
There is a real possibility with Bay in Canada, marketing through their Home Outfitter’s store. New management and remodeling in many stores seem to be keeping Bay in business through these times. The market is a less crowded; LNT has loyal shoppers here. As always, execution is key.
However, the success of LNT in Canada won’t easily translate to a US revival. Too much has been lost and competition is aggressive from several channels. A new approach is required for LNT south of the border.
Name recognition is valuable, even for a failed brand. Each of these brands has a number of ex-customers with a positive bias and/or emotional connection with the name. The challenge is to identify the core aspects of the brand and keep them intact. For instance, Sharper Image was known primarily for its relatively unique offering of leading-edge personal technology with an implied “best in class” quality level. As long as Macy’s can remain true to this value proposition, it should be plus business. If, however, the product with this name does not live up to these brand characteristics, it will not be successful.
I think focusing on a “revival” of the Linens ‘N Things name as a going retail concern is beside the point for the brand’s owners.
Hilco and Gordon Brothers paid a mere $1 million for LNT’s intellectual property. They are presumably taking a percentage of sales from www.lnt.com, which is operated by a third party. They will get a piece of the $100 million in retail sales the brand is expected to generate over six years at Home Outfitters.
It doesn’t matter to them whether LNT rebounds in the classic sense, and I see no evidence to suggest that strategy. Once the owners make back their money, it’s all gravy. They’ll wring as much they can out of the name then move on.
I agree with Jennifer. Linens ‘N Things and almost all other “revivals” of this type aren’t real revivals. They are just ways to squeeze every last drop of remaining equity out of these brands. 5 to 10 years from now, these “brands” will be gone for good.
It’s impossible to accurately predict the success of the proposed LNT product line. That said, there can be no doubt that consumers will be the final judge. It’s the shopper who will ultimately determine whether the product line resonates with their home lifestyles. If those goods do, then LNT will succeed; if not, then the proposed product brand will soon disappear.
In other words–and regarding all these “Lazarus brands”–I don’t think the majority of today’s savvy consumers really care whether the store chain went bankrupt or not. They’re looking for products on the shelf today that fulfill today’s needs, including price, quality, comfort, novelty, uniqueness, etc. If a blast of branding from the past meets their current needs, so be it.
A Marshall Field’s brand of gourmet foods or home goods might find a market. But as a former customer, much of what was special about Field’s was the “big store” excitement of shopping there. I don’t equate any one type of merchandise with the store other than the really great food in their restaurants.