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ITALY'S LUXURY LINEN MAVEN FRETTE WANTS TO OPEN MORE STORES IN THE U.S.

By Molly Knight

Banking on its belief that home is where the bed linen is, and that the more expensive, the better, Frette is going forward with a major U.S. rollout of its luxury linens brand.

Milan, Italy–based Frette has 10 stores in the U.S., but its customer base remains mainly upscale hotels. In a bid to get into U.S. bedrooms, however, the company is planning a tiered expansion plan it will execute over the next five years or so. The idea is to bring anywhere from 35 to 50 new units into malls and luxury lifestyle centers and onto high-end street locations, says Paul Raffin, CEO of Frette's North American operations.

In December the company opened a 1,200-square-foot store at the luxury Americana Manhasset (N.Y.) Mall. Raffin predicts that this unit will generate sales in excess of $2,000 per square foot.

This company need lose no sleep over the recession, says Suzanne Hader, principal of New York City–based 400twin, a luxury-market research and consulting firm that has no business link with Frette. “Even with the struggling economy, people are interested in spending money on their homes,” Hader said. “Especially since people want to update their homes almost on a yearly basis, instead of just buying furniture and keeping it forever, like they did 20 years ago.”

The 150-year-old Frette has long provided linens (and towels and bathrobes too — we all have to get up sometime) to Ritz-Carlton and boutique hotels, which has helped cultivate a built-in wealthy clientele. Embroidered robes go for $550, bath towels for $100 each. The 600-thread-count, Egyptian cotton linens can run up to $2,400 per set. (Let out breath here.)

The prices are steep, sources acknowledge, but they have not scared away the target demographic. “Quality is the number-one must-have for any luxury brand,” said Hader. “As far as sheets and home fashions go, Frette has come to represent the highest standard.”

Frette will be in the company of Bottega Veneta, Chanel and CH Carolina Herrera, to name but three of the luxury co-tenants at Americana Manhasset.

“Our customers are as discerning in outfitting their homes as they are in selecting their apparel,” Deirdre Costa Major, president of Americana Manhasset, wrote in an e-mail. “The venerable brand's offering of luxury accessories from loungewear to gifts provides another extraordinary resource that our clientele can conveniently shop at Americana Manhasset.”

Currently, Frette has one U.S. outlet store, which has been at Woodbury Common Premium Outlets, in Central Valley, N.Y., for three years. The center's owner is Chelsea Property Group, a Simon Property Group division. The store is a big draw for area residents and for tourists, sources say.

“Frette is one of the highest-quality names in home furnishing,” said Michelle Rothstein, a Chelsea spokeswoman. There are relatively few players in the fine linens and home furnishings category, observers say, perhaps unsurprisingly. But a key Frette competitor, Ralph Lauren Home, is also a tenant at Woodbury Commons.

Rothstein says that visitors to Woodbury Commons who frequent fine hotels are familiar with the Frette name, though many others are less so. “A lot of people haven't heard of Frette,” said Rothstein. “But the people who have, walk by and get excited.”

Even in an uncertain economic climate, super-posh home furnishings stores like Frette have little reason for anxiety, some say. For the past six years, the American Affluence Research Center has conducted a semiannual study on the spending habits of the wealthiest 10 percent of U.S. households. In the survey for last fall, 600 individuals reporting personal net worth of about $3.1 million and personal annual income of about $250,000 answered questions about their anticipated spending across 17 consumer categories (including home furnishings) in coming months.

The survey's index of 100 represents no change in these consumers' spending plans. For home furnishings, the index fell five points from last spring, to 95, a reflection of the sagging U.S. economy, according to Ron Kurtz, president of the research center. Even so, though, the home furnishings sector was stronger than home entertainment (at 92), major appliances (89), designer apparel (78) and jewelry (66). “We've seen a decline in most categories,” said Kurtz. “But home furnishings isn't as vulnerable as some of the others, because it's easier to cut back on fine jewelry and accessories, because it's not considered as much of a necessity.”

Kurtz says he believes Frette will do well as it opens U.S. boutiques. Others, however, point out that when luxury brands expand their footholds, they should refrain from growing too fast and avoid large ad campaigns. “To these shoppers, exclusivity is extremely important,” said Hader. “They're not interested in purchasing linens that can be found at every Bed, Bath and Beyond.”

To be sure, Frette has shown that it does not fear to make its products available to the masses, by allowing consumers to shop online. Some call this smart. “A lot of high-end brands worry that if they sell through their Web sites, that they'll diminish the brand by making it available to a mass market,” said Hader. “But the price already makes it exclusive. Every 10-year-old boy knows about Ferrari cars, but only a select few will be able to afford one when they grow up.”

To maintain the feel of exclusivity while making its products more readily available, Frette should refrain from discounting last season's items, sources say. “Other companies, like Hermès and Louis Vuitton, that serve the ultra-wealthy, never have a sale, and it's one of the secrets to their success,” said Milton Pedraza, CEO of the Luxury Institute, a New York City research firm. “If anything, I think they should try to go even further upmarket.”

One of the ways Frette positions itself as a luxury brand is its specialized customer service. “The level of service is much higher and the employees are much friendlier than you'd find in the average store,” said Hader. “This is an absolute must going forward.” Pedraza argues that hiring, training and retaining high-quality salespeople is the major variable for Frette's success. “They've got a great product, and the name-brand recognition is there amongst the wealthy,” said Pedraza. “But the secret sauce is the service. Ritz-Carlton and Lexus test people before they hire them, and Frette should do that as well.”

Officials are mum about where Frette will go from here, but in November Raffin announced that the company has its sights set on opening a store in Boston next, and that boutiques in such upscale markets as East Hampton, N.Y., Greenwich, Conn., and Santa Barbara, Calif., would not be far behind. The Southeast and Southwest are also hot spots, given the e-commerce business Frette already has in those markets. Atlanta, Dallas, Houston and Bal Harbour [Fla.], are targets too.

Price points will be high, but, as any luxury lounger would say, it's the thread count that counts.