A retail giant has fallen, or well, at least slipped off the top of the winner’s podium. At the end of July, Home Textiles Today reported that Bed Bath & Beyond overtook Walmart to become the biggest seller of home textiles in the country. The specialty retailer racked up $3.74 billion in home textiles sales in 2011 compared to $3.625 for Walmart. Another notable winner: Macy’s, which reported 6% growth in the category for 2011, compared to a 1% decline the previous year. This moved the retailer ahead of Kmart and into spot six on the largest textile sellers’ chart.

This shake-up has been coming for a while as Bed Bath & Beyond steadily grew sales, coming in at $3.092 billion in 2008, $3.190 in 2009 and $3.535 in 2010. What drove the gains? The retailer’s coupon program, back-to-school efforts and popular bridal registry all deserve credit. But we think the biggest key might be the chain’s wide product selection and periodic roll out of exciting new brands. A recent partnership with Orla Kiely, for example, filled BB&B shelves with sheets and comforters that live up to UK designer’s nickname as the “queen of prints.”

But we believe there’s a bigger trend at work here, too. Specialty stores are doing well across the board, with positive numbers from BB&B, Williams-Sonoma, Ikea, Anna’s Linens, HomeGoods and more. Other winners in today’s choppy economic waters: Value department stores, such as T.J. Maxx and Marshalls, and upper department stores like Macy’s and Bloomingdale’s. These three retail segments all have something important in common: Exciting brands to drive consumer interest and demand.

The retail segments without sales-boosting brands aren’t faring as well with consumers, and as a result, these businesses face flat or declining sales. The value supercenters, such as Walmart, Target and Kmart, all fall into this column. Shop for bedding at Walmart, and you’ll largely find yourself facing an aisle of private labels, such as Canopy, Mainstays and Hometrends. The mid-tier department stores like J.C. Penney and Kohl’s also find themselves struggling to stand out in home textiles and other categories with current brand selections.

With all this in mind, we wouldn’t be surprised to see more changes on the list of top home textiles retailers in the next few years. BB&B has proven that with the right product and brand mix it’s possible to steal customers away from bigger value chains. Even when that value chain is the largest retailer in the country. It’s all about the right brands and the excitement for shoppers that comes along with them.

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