Why 'worst' year also was one of the strongest
By David Perry, Executive editor -- Furniture Today, February 17, 2002
Was 2001 one of the best years ever for bedding?
At first blush, that looks like an odd, even ridiculous, question. After all, it seems certain that 2001 will see the largest dollar and unit declines in the last two decades. That macro view has led me to describe 2001 as the worst year for bedding in two decades.
But some of you have challenged me on that assertion. (Note to bedding executives: Feel free to share your complaints, compliments and challenges with me. This is your column too.)
So let's take a closer look at what happened in 2001.
First, it was a year of substantial dollar and unit declines. The final figures from the International Sleep Products Assn. won't be known for months, but at this point it's looking like dollars will be down 5.5%, with units off by 7%. Those are obviously big declines.
But — and there are many buts in this whole scenario — those declines come after many years of steady growth in units and dollars. That growth has pushed the industry's performance to record levels. With one exception, each year in the last decade we took dollars and units to record levels.
Even with the reversals in 2001, the industry did post one of its strongest years ever. We only gave up a year or two of the gains we achieved in the '90s.
That's one of your complaints about my "worst year in two decades" assessment. Some of you have suggested that I could just as easily have called 2001 the "second- or third-best year in bedding history."
True enough, I suppose. But that seems like a PR stretch to me.
Let's look at the issue from another perspective: How did bedding do on retail floors? A lot better than some other major categories.
Both upholstery and domestic wood shipments are projected to be down substantially for 2001. Producers in those categories would love to settle for the smaller dollar declines expected for the year in bedding.
Bedding's relative strength suggests the category actually gained ground on retail floors in 2001. Retailers, facing shrinking demand for their wares and dropping profit margins, relied on Old Reliable — bedding — to pay their bills.
Historically, bedding has had the highest gross margin return on investment of any home furnishings product. In a tough year like 2001, bedding was more important, and more appreciated, than ever. That's a big plus, one that should position bedding even more strongly in 2002.
No one expects business this year to come roaring out of the blocks. Guess what category retailers will be promoting to pull traffic?
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