Can specialty sleep maintain buzz?

By David Perry -- Furniture Today, March 21, 2004

HIGH POINT — HIGH POINT— Select Comfort, a maker and retailer of air beds, is soaring.

Tempur-Pedic, the visco-elastic foam pioneer, has a cushy sales history.

And specialty sleep lines offered by everyone — from some of the industry's biggest bedding producers to small, niche players — are practically flying out the door on retail floors across the country.

Specialty sleep is generating plenty of buzz in the bedding industry these days. But will the buzz last? Is this boom going bust anytime soon?

Some bedding purists (think innersprings) invoke the cautionary tale of the waterbed as they assess the current level of interest in specialty sleep. Remember waterbeds? That product burst onto the scene in the 1970s. But the big splash it created initially has turned out to be just a few drops, relatively speaking, in the vast sea of sleep systems on the market nowadays.

Yet the appeal of today's specialty lines, encompassing foam, air and water sleep systems, is far broader than the hippie cachet that sparked the waterbed craze.

With no firm figures available on the size of the specialty sleep market (see accompanying story), bedding insiders are left to their own devices to sort out the strength of the category. Almost without exception, the overall assessments are the same: The category is growing. But it's anybody's guess exactly how big it is.

Opinions about where the category is headed also vary. Some observers with deep roots on the conventional side of the business think specialty sleep could be headed for a fall.

Airbeds and visco-elastic beds "will have a run and then they will decline," said Jimmy Bush, who oversees innerspring operations at supplier Hickory Springs. "But I don't think either will decline as much as waterbeds."

Some consumers "will legitimately need those features," Bush said. But he predicted that innersprings will reign supreme for many years to come.

Ed Lilly, president of Serta, one of the nation's largest conventional bedding producers, said negative publicity stemming from higher return rates than for those of conventional bedding could slow the growth of the specialty sleep category.

And the lower return rates for conventional bedding suggest that "we have more satisfied customers than they do," Lilly said.

Veteran observers of the specialty sleep category say it's here to stay.

Ron Ainsworth, president of Fashion Bed Group, the industry's leading metal bed supplier, has been watching the specialty sleep category since he was a part of it at waterbed producer Somma several years ago.

"Look at what Tempur-Pedic and Select Comfort have done," Ainsworth said. "That is here to stay. It is sophisticated, informed consumers who are buying those products today. They won't suffer from the image of long-haired hippies."

John McNeill, another veteran observer of the bedding scene, sees the specialty category growing. "Specialty sleep will become a bigger category because its product offerings will become more segmented," he said. "There will be more and more variations on what we can sleep on."

New products create consumer needs and desires, he said, noting that all products have life cycles. "Some are long and some are short," said McNeill, a sales associate who has years of experience in the specialty sleep channel. "But the fact of the matter is that the specialty sleep segment as a subset of sleep products will always exist, while the entries within that subset will change."

Specialty sleep producers don't see any slowdown in the cards.

Denny Boyd, president of Boyd Specialty Sleep, a leader in that category, says the demographics favoring specialty sleep are irrefutable. "As consumers get older," he said, "they are more concerned with getting a good night's sleep." Consumers not sleeping well on innerspring beds will seek out products that offer an alternative.

That will continue to fuel sales of air beds, a category about which Boyd says, "I've never seen anything so explosive since the early days of waterbeds," as well as sales of foam beds.

"Just about every month is a record month for us," said David Fogg, president of Tempur-Pedic's retail division.

He is predicting "tremendous" growth this year in same-store sales for Tempur-Pedic, and also sees distribution continuing to expand. "We still have a lot of doors to knock on," Fogg said.

Tempur-Pedic's success

Tempur-Pedic, whose success has inspired a wave of visco-elastic introductions and even spawned the creation of some similarly named companies, has expanded its mattress line to three models with the recent addition of its CelebrityBed, a pillowtop. And it has a new gallery program that will display its products to good advantage on retail floors.

"We want the category to grow," Fogg said. "The fact that visco bedding is becoming a widely accepted product is good. We know we will garner a large share of the growing visco market."

He doesn't think the growing competition in the visco arena will burst Tempur-Pedic's bubble. "It helps us," Fogg said. "It increases the category. We know, because of the advertising we do, that we will get a certain percentage of the market."

Natura is one of many specialty sleep companies to enter the visco category, which it did earlier this year. Larry Klein, the company's director of sales, isn't bashful about crediting Tempur-Pedic with driving the category. "Tempur-Pedic exposed specialty sleep to the masses," he noted. "There are a large number of Baby Boomers who are not sleeping well and who are looking for something better."

"There will always be a place for visco," said Jon Ritchie, general manager of Perfect Rest Bedding. "It contours to the body better than innerspring bedding. Whether visco will stay this hot is the question."

Perfect Rest, based in Tacoma, Wash., was one of several bedding producers showing visco beds at the San Francisco Furniture Market earlier this year. That group included Ergo-Pedic, a Downey, Calif.-based visco producer looking to expand its distribution nationally.

Asked if a visco slowdown could be coming, George Klause, Ergo-Pedic's vice president, responded: "Not that we can see. Demand is very high. Everybody wants visco."

On the other side of the country, High Point-based Thurmo-Pudic USA also is seeking its niche in the crowded visco market. "We are a small company, and it's a big, big market," said President Rod Whitney. "If we get a small slice, there is room for us. As a small company, we can adapt quickly." And Thurmo-Pudic offers sharply priced visco beds that are more affordable than competitors' products, he noted.

Products expand reach

Consumers have a wide array of sleep choices today. And they don't have to turn only to specialty sleep products to enjoy some of the comfort features offered by those products.

Key specialty sleep constructions, including layers of latex foam, visco-elastic foam and other foams, are found in a growing array of innerspring bedding lines, a development that is blurring the lines between conventional and specialty sleep products.

New air beds being introduced by Restonic, for example, feature air chambers placed atop a layer of innersprings. That is a hybrid product, with elements of both conventional and specialty sleep.

"Lots of hybrid products are available," said Bruce Glassman, sales manager for Cannon Sleep Products, which makes conventional and specialty bedding and futons.

Several bedding producers who mainly market innerspring models also have entered the specialty sleep arena, another way in which the line between traditional and specialty sleep is blurring.

Top 10 bedding maker Therapedic, for example, is aggressively pursuing the visco market with its new MemoryTouch line of beds.

"There is an extraordinary amount of business being done in the specialty sleep category," said Gerry Borreggine, Therapedic's vice president of sales and marketing. "We developed a product which will allow retailers to communicate to consumers that they are definitely in this specialty sleep business with the MemoryTouch line."

Specialty sleep producers also are coming up with their own combinations of materials.

Sterling Sleep Products, for example, offers combinations of visco and latex in its sleep sets. Tony Hochschild, president, says each product has its place.

"I think latex is the aristocrat of the foams," he said. "Latex beds are renowned for delivering high-quality comfort for years and years. The big advantage visco has is the sizzle. The story of that visco handprint is compelling."

He says specialty sleep is a better way to sleep. One of his brochures has a picture of a bed of nails and this headline: "Metal in beds! What were they thinking?"