Spring Air closes plants
Three licensees remain in business
By Larry Thomas and David Perry -- Furniture Today, May 11, 2009
TAMPA, Fla. — Spring Air unexpectedly closed its nine corporate-owned factories last week after a proposed management-led buyout collapsed.
Three independent licensees of the bedding major are continuing normal operations, despite the corporate shutdown that leaves the future of the venerable brand in doubt.
Spring Air licensees in Greensboro, N.C., Beaufort, S.C., and Grand Rapids, Mich., said they remain in business.
However, the sudden shutdown of the other plants sent many retailers scrambling to replace scheduled Spring Air mattress shipments, since most stores carry little or no bedding inventory.
Spring Air President Steve Cumbow was unavailable for comment, and he cancelled his scheduled appearance on a panel discussion at last 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 Columbus, Ohio, and Dallas.
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.
There was no filing as of last Thursday; check www.furnituretoday.com for updates.
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 its sales fell below $200 million in 2008.
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