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UPDATE: Spring Air closes, but licensees still active

Retailers scramble to replace line

Larry Thomas , David Perry -- Furniture Today, May 7, 2009

TAMPA, Fla. — Three licensees of bedding major Spring Air are continuing normal operations, despite the shutdown of the national brand this week.

A proposed management-led buyout collapsed this week and the company closed its nine corporate-owned factories.

The move leaves the future of the venerable brand in doubt, although three independent Spring Air licensees in Greensboro, N.C., Beaufort, S.C., and Grand Rapids, Mich., are continuing normal operations.

The sudden shutdown also sent many retailers scrambling to replace previously scheduled Spring Air mattress shipments since most carry little or no bedding inventory.

Spring Air President Steve Cumbow has been unavailable for comment this week, and he cancelled his scheduled appearance on a panel discussion at this week's Furniture Today Bedding Conference.

However, multiple industry sources said Cumbow's proposed buyout deal collapsed and that the company's current majority owner, the investment firm American Capital Ltd., decided to shut down operations.

Under the unsuccessful proposed buyout, the company had planned to operate with just two corporate-owned plants, in Dallas and Columbus, Ohio.

John Grove, CEO of Spring Air's Greensboro licensee, said his company has the rights to use the Spring Air name, trademarks and patents even if Spring Air corporate, the licensor, files for bankruptcy protection or goes out of business.

"It's business as usual for us," said Grove, whose company is the largest of the independent licensees. "We have a strong cash position and no long-term debt."

Grove said his licensing territory covers North Carolina, Virginia and West Virginia, but he has fielded dozens of calls from retailers in other states in recent days asking him to ship Spring Air product.

"We're getting a lot of business from this very unfortunate situation," he said.

Grove and the other two licensees opted to remain independent when Spring Air executed a buyout, or roll-up, of most of its licensees in June 2007 and moved its corporate offices to Tampa.

Grove said he hasn't ruled out a bid to buy the licensor himself, but is waiting to see if another buyout deal emerges or the licensor files for bankruptcy protection.

Spring Air was the sixth largest U.S. bedding producer based on 2007 sales, according to Furniture/Today's latest industry ranking. Its shipments that year were estimated at $272 million, down 17.3% from $329 million in 2006.

Several industry sources said sales fell below $200 million in 2008.

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Spring Air closes plants

May 11, 2009

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