Executives share views on 2004 prospects

By David Perry -- Furniture Today, January 25, 2004

HIGH POINT — HIGH POINT – Bedding executives weigh a complex set of variables as they gaze into their crystal balls and forecast business conditions throughout the new year.

An improving economy and a strong housing sector are big pluses in their outlooks. Many bedding CEOs say these factors could give the bedding industry a great year in 2004.

On the negative side of the ledger, the execs say a major terrorist attack or economic downturn would leave the industry with the prospect of a challenging year.

Here's how more than a dozen leading producers responded to questions about what would make for a great year in 2004, and what would make for a challenging year.

It will be a great year for bedding in 2004 if…

"The industry continues to improve our product assortments and values, stimulating more retailer interest and consumer demand. Additionally, shortening consumers' expectations about the life of their mattress would also be a positive move for the industry as it would also stimulate incremental sales over time."

–Dave McIlquham, president, Sealy

"The industry can focus on innovating healthier products for the consumer vs. expending energies on issues such as California's Technical Bulletin 603 (that state's open flame mattress flammability standard) that provide no consumer benefit." – Bob Hellyer, president, Simmons

"The economy and housing sector remain strong."

–Larry McKay, president, King Koil

"No ifs, it WILL be a great year for bedding in 2004!!!"

–Kerry Tramel, president, Lady Americana

"Consumer pent-up demand for our products is released in an overdue wave of shopping activity."

–Gerry Borreggine, vice president of sales and marketing, Therapedic

"Employment numbers improve, because that in itself will be the primary driver of consumer optimism."

–Ed Scott, president, Restonic

"Consumer confidence continues to increase and consumers become comfortable spending on durables again."

–Bill McLaughlin, chief executive officer, Select Comfort

"If there are no more terrorist attacks in the U.S. and the recovery continues."

–Jim Nation, president, Spring Air

"If we see the consumer come back to the marketplace with confidence. The consumer has not lost confidence in the housing market. The furniture and bedding industries need to create that same excitement. We have to sell better sleep and better bedding to get the consumer interested in our products."

– Pat Flippin, president, Kingsdown

"If retailers can close a higher percentage of customers who intend to buy a new mattress, closing the gap between the consumers who intend to buy and the ones who actually buy."

– Ed Lilly, president, Serta

"If the economy stabilizes and we can implement new flammability regulations without a lot of distractions."

– Dave Clark, vice president, Englander

"If we don't have any more major terrorist attacks. I don't see the economy turning back. We've got too much momentum."

– David Fogg, vice president, retail division, Tempur-Pedic

"If the stock market continues its growth path and interest rates are stable, allowing the housing market to remain strong. With the housing market remaining strong in suburban areas in particular, newer homes with larger bedrooms will fuel sales of queen and king sizes as well as premium and ultra-premium products."

– Stuart Carlitz, president, Eclipse International

It will be a challenging year for bedding if…

"Federal or state government regulations are not decisive on final fire resistant timing and standards, and manufacturers and suppliers within our industry are not prepared, or can't meet their commitments. The industry cannot allow FR to become a negative issue with the consumer press. Further, if cost increases for FR solutions impact consumer demand, the industry will be affected."

– Dave McIlquham, president, Sealy

"There is a terrorist event that impacts the economy."

– Bob Hellyer, president, Simmons

"If component prices continue to rise, that could cause some problems. That affects the profitability of the manufacturer, which affects the aggressiveness of the manufacturer."

– Larry McKay, president, King Koil

"Consumer confidence in the economy continues to be uncertain, causing a further delay in home furnishings purchasing."

– Gerry Borreggine, vice president of sales and marketing, Therapedic

"If our economy is affected by outside negative influence, i.e., ongoing and expanding war in the Middle East and/or devastating terrorist attacks on U.S. soil."

–Ed Scott, president, Restonic

"Consumer confidence is shaken by economic softening, terrorism or politics."

– Bill McLaughlin, chief executive officer, Select Comfort

"If there are terrorist attacks."

– Jim Nation, president, Spring Air

"If the economy does not stabilize and we can't implement new flammability regulations without a lot of distractions."

– Dave Clark, vice president, Englander" It is always challenging. That is what makes this such a competitive industry to work in."

— Kerry Tramel, president, Lady Americana

"If we continue to fight in a commodity marketplace that invites more players into a market that hasn't increased in size. Until we go after the consumers who are not in the market we will be fighting over marginal sales growth."

– Pat Flippin, president, Kingsdown

"If there is political fallout from the elections and if volatile issues facing the industry such as restrictive trade tariffs, import quotas and dollar fluctuations continue to be unresolved."

– Ed Lilly, president, Serta

'If there was a major terrorist attack it would be a horrible year."

– David Fogg, vice president, retail division, Tempur-Pedic

"If interest rates shoot up or if the stock market slows or declines. Another area of difficulty is that flammability continues to haunt bedding manufacturers with a great deal of uncertainty.

"Questions include: What will the final standard be, and what will be suitable solutions for a flame-retardant product?

"If California brings back the flammability conformance date of January 2005 without the proper time to prepare, it will bring havoc on the industry."

– Stuart Carlitz, president, Eclipse International