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Bedding independents share outlook

Second-tier producers are less optimistic about '05 sales prospects than the majors

By David Perry -- Furniture Today, January 30, 2005

High Point — Leading bedding independents and second-tier producers are somewhat less optimistic about business prospects this year than their bigger brethren.

Furniture/Today's Consensus Bedding Forecast, issued last month, sees a 1.9% increase in the volume of bedding shipments this year, and a 7.2% gain in the dollar value of those shipments. That forecast is based on projections from most of the players in the ranks of the Top 12 producers.

But the forecasts of bedding producers who aren't large enough to make that list are slightly less enthusiastic. The smaller producers collectively see a 1.5% gain in units this year, and a 6.9% gain in dollars.

Like the bedding majors, they say that specialty sleep should be a key business driver this year.

"I believe that the industry will have a solid growth year in 2005," said Jimmy Orders, president of Park Place Corp., which markets both conventional and specialty sleep bedding lines. "Specialty sleep, especially, will continue to prosper."

He continued: "At Park Place, our focus is on a growing strength in the specialty sleep category in product and a willingness to be a leader in sales and marketing relative to the Internet and other emerging distribution channels. 2004 was the best year in our 73-year history. Our business plans for 2005 call for more of the same."

Orders also noted that the industry is benefiting from "increasingly good demographics. As the baby boomers grow older, they also grow smarter. Their father's advice is beginning to ring true. 'Son, always buy good shoes and sleep on a good mattress, because if you aren't using one you are using the other!' "

Gold Bond, a futon leader that is aggressively growing its conventional bedding business, sees a challenging year for the industry, said Bob Naboicheck, president.

"2005 will generally be a tough year for retail," he said. "Bedding will do better as a category than the rest of home furnishings, as it has always been the promotional backbone of the industry. Specialty sleep and high-end bedding will continue to grow in 2005."

Naboicheck said Gold Bond will be emphasizing the basics, "reviewing our product lineup and making sure that we have the most competitive values at each price point. We also want to make sure that both the end consumer receives the most value for their money and that the retailer can work on the highest margins in the industry."

In addition, he said, "we will continue to work with each retailer on an individual basis, to make sure they are effectively using their advertising dollars in their markets. Gold Bond will continue to grow as we refocus our expertise back to the conventional bedding industry and re-establish distribution across the U.S."

Neal Grigg, president of Carolina Mattress Guild, sees the industry continuing the trend of dollar growth outpacing unit growth.

"Generally, bedding will not have any significant gain in pieces," Grigg predicted. "I do not see any changes which would increase the disposable income of most Americans. However, due to the inflationary costs of many raw materials plus the continued growth of the luxury bedding market, the dollar sales should outpace the pieces dramatically."

At Carolina Mattress Guild, he said, "We will continue to do what works for us, which is to stress exceptional value, safety, quality and styling in order to continue our market penetration."

Stuart Carlitz, president of Eclipse International, doesn't see a major gain in units this year.

Some overall gains in the economy "may be countered by slowing housing construction due to rising interest rates, so we expect only a slight increase in the bedding units purchased," Carlitz said. "We also expect to see a continued increase in the premium bedding market as the consumer becomes more knowledgeable about the benefits of better bedding via their Internet research and upgrades to better quality mattresses. As the overage price point continues to rise, the dollar value growth will continue to outpace the unit growth."

Eclipse will be celebrating its 100th anniversary with special promotions throughout the year, Carlitz said. The company also plans to roll out new models of its Spinal Zone II and Allergy Free beds, and will announce "a very important chiropractic alliance."

Elipse's gains will be fueled by the strength of its midpriced and premium mattress lines, Carlitz predicted.

Bemco President Daryl Tarbutton says that rising bedding prices could nudge selling prices downward.

"Everyone is increasing their prices," he explained. "Generally, when retail price points go higher, it affects the consumer. They will still buy, but they may go to the next price point down. There are plenty of retail price points out there. If the consumer doesn't want to pay $699 for a new set of bedding, she might pay $599."

Tarbutton noted that Bemco continues to do well at mass market price points from $500 to $1,000, although it does have interest in beds retailing at higher price points. He said Bemco's ad-a-month advertising program gives retailers plenty of ammunition to keep their promotions fresh.

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