Bedding makers say price increases on tap
By David Perry -- Furniture Today, March 7, 2004
HIGH POINT — Bedding producers, hit with unprecedented steel price hikes, say retailers should get ready for significant price increases.
"This will be the first time there will have to be an industrywide price increase that is not merchandised into new bedding lines since 1973," said Jim Nation, president of Spring Air.
Bedding producers typically pass price increases on when they remerchandise lines, something that only happens every few years on flagship lines. But ongoing price hikes from steel suppliers, including an 8.5% price hike on innersprings, wire components and mounted box springs recently announced by Leggett & Platt, leave them no choice but to raise prices to retailers, they say.
Nation estimated the price hikes eventually could push retail prices up by as much as $100, with a $599 queen-sized set becoming $699. Retailers, of course, set their own prices.
Significant price increases could weaken consumer demand for bedding, Nation said.
Gerry Borreggine, vice president of sales and marketing at Therapedic, said the price hikes will be a problem for retail sales associates.
"It's mind-boggling for the guy in the mattress department who doesn't understand the global issues," he said. "He just understands how much more difficult it will be to sell a $599 bed which may become $699. And this guy is the messenger to the consumer. He is saying, 'What happened to my $599 bed?' "
Leggett & Platt, a major supplier of a wide variety of bedding components, said the 8.5% price hike, its third since last fall, will be effective March 15. It has raised prices of steel components by a total of about 19%.
"These new prices will be firm until May 3, 2004, at which time you should plan for additional increases due to the unprecedented upward spiral of prices for scrap steel, rod and wire," said Jay Sanders, vice president and director of marketing for L&P's Bedding Components Group, in a Feb. 13 letter to bedding producers.
He added: "We have empathy with the effect these changes have on the costs of your manufactured bedding and we are doing only what is necessary to remain a viable resource for the broadest offering of quality bedding components available."
Prices for rod and wire "remain volatile," and global forces are driving the "horrific inflation" in steel prices, Sanders said in an earlier letter to customers.
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