High Point — Premium looks and feel may be the alarm that awakens a segment of the industry that's been as flat as the surface of an extra-firm mattress.
The segment is sofa-sleepers, a once-thriving business for upholstery producers that has been steadily fading.
"The sleeper business has been on a decade-long decline," said Vernon Bigsby, vice president of marketing for Leggett & Platt's home furnishings components division. "For manufacturers, it's a very low-margin item and a low margin on the retail floor."
Sales of sleeper units have fallen to around 1.8 million to 2 million units from 2.5 million to 2.75 million in 1993. Manufacturers say the decline hasn't been a total loss, with much of the slack reclaimed in sales of motion, sectionals, oversized chairs and futons.
But despite still producing significant numbers, the category is treated as an industry step-child.
Specialists like Claude Gable and LaCrosse still do a strong business in sleepers, and at least three of the top 10 manufacturers say they do some $20 million in annual sales without even trying. But even the big producers shrug the category off.
"It's flat, and we don't see much growth in that category," said Broyhill's Mike Delgatti Jr., vice president of marketing, upholstery. The feeling is echoed by many of his counterparts.
"In some respects it's our own choosing," Delgatti added. "We're focusing on the tag-along sleeper business (sleepers sold as part of a bigger ticket) rather than the free-standing sleeper business that's so price sensitive."
Kerry Lebensburger, president of sales for Ashley's upholstery division, said that there's enough margin starting in the $499 to $599 price points to make this business profitable. "The problem is in getting dealers to show them," he said. "And, once they show them, they've got to take the plastic off."
Telling the story
Sleepers, he added, are best merchandised in a room setting. "You don't have to open them up. But you do have to have a table that you can move. So many times you'll see an elephant with a glass on it. How are you going to move that?"
While sleepers are an unsung product, virtually every retailer wants to make the option available on their floor. And an important handful, including Art Van, R.C. Willey, Jennifer Convertibles and Nebraska Furniture, all have stand-alone programs in their stores — a fact not lost on suppliers.
"We offer 80% of our product line as tag-along sleepers," said Ron Smith, vice president of sales and marketing for Alexvale, a division of La-Z-Boy. "It's a convenience to our retailers as much as anything else."
Smith said that the sleeper category is "a commodity item, driven by price. Given our resources, we just didn't think it would be advantageous to us" to develop a large-scale program.
"Nobody's setting aside retail space for high-end sleepers," he added. "The dealers would rather tie up dedicated space with leather. They can do a whole lot more business in leather than they can in sleepers."
One factor in lagging sales is consumer perception, according to Larry Smith, senior vice president, corporate marketing for Berkline/BenchCraft. "Unfortunately, the image of the industry is a cheap mattress, something for the in-laws," he said.
Package selling
But sleepers make a "good contribution" to his company's bottom line, he said, with the bulk of sales attributed to tag-alongs. "If you sell it as a tag-along, you can do pretty good because you have a contribution from tag-along pieces. But if you sell it as a stand-alone, it's such a commodity market that it's not as healthy a margin as you'd like."
Not everybody sees the category as a sleeper, however.
Erika Alix, vice president, sales and marketing for St. Charles Furniture/Eau Claire Mattress, said her company has added sleepers to some upholstery groups and added an optional deluxe mattress for an up-charge.
"We see larger growth in the more traditional styles," she said, noting that the bulk of the company's sleeper sales fall in the $599 to $799 retail price range. "I don't know if we're targeting any one group, but there seems to be a larger demand for that style."
"It's growing for us," said Don Graves, director of sales and marketing for contemporary maker Lazar Furniture. "We're having to add additional SKUs in the line on the fly because of demand."
Lazar is strong in urban markets like Los Angeles, Philadelphia, New York and San Francisco, where space is at a premium and multi-function a plus.
"It's a wonderful addition for a dealer to have a frame that he can sell in two different ways," Graves said. "You can sell it with all the additional fabrics. But to also say that it is available as a sleeper will attract more customers."
Functional enhancements
What appears to be taking the category out of its Rip Van Winkle state and adding excitement are upgraded mattresses and improved sleeper mechanisms. La-Z-Boy, for instance, led a parade of manufacturers offering air/innerspring hybrids with its SlumberAire mattress system introduced two years ago.
At Flexsteel, Leggett & Platt's Majestic Air mattress — a new version of its Dream Air product — is helping to spark new sales, said Keith Feuerhaken, vice president of sales.
"Our sleeper business has been flat, and has been a category we've been challenged with," said Feuerhaken. "But I think we turned the corner at the October market with a multifaceted strategy."
Majestic Air was featured on 31 companies' sofa-sleeper introductions at the October market. "We're using it in our premium styles and (have) incorporated it into our Christopher Lowell collection," said Feuerhaken. The Lowell addition was made last month at the San Francisco market.
Growth, he said, is pegged on simplifying the ordering process, and offering a comfortable mattress that rivals a conventional bed. Once consumers try the Majestic Air, Feuerhaken said, "They say, 'I wouldn't want any other mattress in my home.'
"Of course, these are more expensive. But if we could capture a little of that success in our better bed business, I think we could have that as a flagship and the rest of the stuff will follow."
The Cloud Coil innerspring/air mattress has raised the bar in Rowe Furniture's sofa-sleeper program, according to Corey Keifetz, vice president, marketing.
"It's one of the few category features that provide real benefits and is not a gimmick," he said. Introduced at the April 2002 market, the premium bedding is offered on sleepers across the Rowe line.
"It has sparked additional interest and attention toward that category. And it's fun to show," added Keifetz.
New opportunities
Lane, a top key player in sofa-sleepers, has "struggled over the last couple of years to continue that particular category," said David Wormald, merchandise manager for leather and upholstery. Developing the Snuggler — a twin-sized chair sleeper —and a new twin-fold queen program and upgrading the cover selection "has re-exploded our sleeper business," he said.
"The emphasis has shifted. Whenever I visit retailers, very few have sleeper departments. Most are putting a stationary sofa on the floor and double-tagging it (so customers know it's also available as a sleeper), so that business is weak.
"If they put the sleeper, not the sofa, on the floor and double-tagged it, that would be a more positive way of approaching it," Wormald added. "People want to sit on the sleeper, not the sofa. They want to know what the sleeper feels like."
Besides a comfortable mattress, consumers also want a sleeper that extends easily, said Dwayne Welch, director of metal sales and manufacturing for Hickory Springs.
"I think a lot of consumers are savvy enough to say they want a mechanism that opens very easily," he said.
They'll check to see if it's got a headrest — "a TV headrest is very important," he said. "And they've got to lie down on that thing and make sure that it's comfortable.
"Comfort and ease of operations are two of the primary things consumers are going to look at."
To increase success on the retail floor, Welch said, "There's got to be room to open the mechanism. A lot of retailers are doing that as opposed to saying, 'Here's a stationary sofa. And by the way, it's available as a sleeper.'"
