Furniture stores losing ground

Insiders' insight:

• "The fastest-growing channel of distribution is the large regional furniture store, which should be considered a channel by itself," said Ed Lilly, Serta's president. "It is misleading to lump all furniture stores together because it looks like the category is diminishing, while the big regional players are growing faster than the market."

• "Clearly there are some shining stars in the furniture store channel, but overall furniture stores are declining," said Jim Nation, president of Spring Air. "There is a reduction in the number of furniture stores. Fewer stores equals less business."

• "There are some exceptions to this, but a lot of furniture stores have grown complacent in bedding," said David Roberts, executive vice president of King Koil. "Either furniture stores will regenerate their position, or bedding will go the way of appliances and carpeting and move to other channels."

• "I think there will be a lot of growth on the part of regional furniture stores and regional sleep shops," said Dave Clark, Englander's vice president.

• "For many retailers the economic climate of the previous 15 months has precipitated a return to the basics," said Kerry Tramel, president of Lady Americana Associates. "Furniture's most recession-proof item has always been bedding, and we have been fortunate in that a growing number of furniture stores have realized the value in promoting their fastest-turning and most profitable category — bedding."

Channel fast facts

• 2002 market share: 40%.

• Change from 2000: Lost 2 percentage points.

Where the channel was represented on the 2002 list of the Top 25 Bedding Retailers:

• 9. Berkshire Hathaway furniture division, Omaha, Neb.

• 10. Rooms To Go, Seffner, Fla.

• 12. Art Van, Warren, Mich.

• 15. Levitz Home Furnishings, Woodbury, N.Y.

• 19. Havertys, Atlanta.

• 21. Slumberland, Little Canada, Minn.

• 22. Value City, Columbus, Ohio.

• 24. Rhodes, Atlanta.

• 25. W.S. Badcock, Mulberry, Fla.

Warehouse clubs gain share

Insiders' insight:

• "Based on our market share reports, warehouse clubs appear to be the fastest-growing segment," said Bob Hellyer, Simmons president. "We do not currently sell our flagship brands to a national club, but will continue to evaluate the club role in our distribution strategy."

• "Warehouse clubs are one of the fastest-growing channels of distribution," said Jim Nation, Spring Air president. "The major players are expanding. The biggest guy — Sam's Club — is expanding significantly."

• "A lot of consumers want to do one-stop shopping," said Dave Clark, Englander vice president. "Every time I go in a Sam's Club, I see someone rolling a mattress out to their car."

Channel fast facts

• 2002 market share: 5%.

• Change from 2000: Gained two percentage points.

Where the channel was represented on the 2002 list of the Top 25 Bedding Retailers:

• 5. Sam's Club, Bentonville, Ark.

• 20. Costco, Issaquah, Wash.

Factory direct captures same market share as 2000

Channel fast facts

• 2002 market share: 4%.

• Change from 2000: No change.

Where the channel was represented on the 2002 list of the Top 25 Bedding Retailers:

None listed.

Insiders' insight:

• "I don't think the factory-direct channel has changed significantly in market share." Jim Nation, Spring Air

Specialty stores gain one point

Insiders' insight:

• "The sleep shop channel may be growing at a faster rate than some people think," said Dave Roberts, King Koil's executive vice president. "In most major metro markets where there are sleep shops, consumers have told us that that is a channel they believe in."

• "A lot of regular specialty stores seem to be doing well," said Dave Clark, vice president of Englander. "But some of the national sleep chains are taking it on the chin."

• "Bedding specialty stores are the fastest-growing distribution channel," said Michael Pino, Therapedic president.

Channel fast facts

• 2002 market share: 33%.

• Change from 2000: Gained one percentage point.

Where the channel was represented on the 2002 list of the Top 25 Bedding Retailers:

• 1. Select Comfort, Minneapolis.

• 3. The Mattress Firm, Houston.

• 4. Mattress Discounters, Upper Marlboro, Md.

• 6. Sleepys, Bethpage, N.Y.

• 7. Mattress Giant, Addison, Texas.

• 13. Rockaway Bedding, Randolph, N.J.

• 16. The Sleep Train, North Highlands, Calif.

• 17. Sleep Fair/Mattress Warehouse, Akron, Ohio.

• 23. Sit' n Sleep, Carson, Calif.

'Other' channels up a notch

Catalogs, telemarketing, direct marketing, furniture rental stores

Insiders' insight:

• "More and more consumers are seeking out and buying from alternative retail outlets, including the Internet and home-shopping programs," said Ed Scott, Restonic president. "There are a lot more TV commercials for bedding today. Consumers are buying from outlets that didn't even exist 10 years ago. Consumers seem to be saying that they dislike the process of buying a bed. One way to avoid that is to pick up the phone and buy that way. Part of the appeal is the ease of purchase. We need to make the shopping experience more user-friendly."

• "The fastest-growing channel is the direct marketing route that Select Comfort (which also sells through retail stores) has taken. They have preceded the furniture manufacturers in going direct to successfully sell their products," said Pat Flippin, president of Kingsdown.

Channel fast facts

• 2002 market share: 7%.

• Change from 2000: Gained one percentage point.

Where the channel was represented on the 2002 list of the Top 25 Bedding Retailers:

• 14. Dial-A-Mattress, Long Island City, N.Y.

Department stores declining

Channel fast facts

• 2002 market share: 11%.

• Change from 2000: Lost two percentage points.

Where the channel was represented on the 2002 list of the Top 25 Bedding Retailers:

• 2. Federated Department Stores, Cincinnati.

• 8. May Department Stores, St. Louis.

• 11. JCPenney, Plano, Texas.

• 18. Sears, Hoffman Estates, Ill.

Insider's insight:

• "There are some shining stars in the department store category, but as a group they are declining." Jim Nation, Spring Air