Sealy, L&P leave ISPA
Their departures, and Serta's, a $1M hit
By David Perry -- Furniture Today, January 30, 2005
High Point — The bedding industry's largest producer and its largest supplier have resigned from the International Sleep Products Assn., helping deal a million-dollar blow to the trade association.
Serta, the first bedding major to depart ISPA, resigned last month.
Together the loss of the three companies represents at least a $1 million financial hit for ISPA, according to Furniture/Today estimates.
Furniture/Today conservatively estimates the dues for Sealy, Serta and Leggett & Platt are in excess of $800,000, but there is some indication they could be higher.
According to the membership dues formula on ISPA's Web site, Sealy's dues, based on a three-year sales average, as the formula specifies, would be about $460,000, while Serta's would be about $315,000.
Furniture/Today's more conservative estimates peg Sealy's annual membership dues at about $350,000, and Serta's at about $240,000. L&P's dues are estimated at somewhere in the $200,000 to $250,000 range.
The companies did not publicly disclose their dues, and it is ISPA's policy not to disclose member dues.
Together, the loss of Sealy, Serta and L&P represents about $800,000 in membership dues alone. But L&P also is a major exhibitor at ISPA's lucrative trade shows, held every two years, and doesn't plan to show at those events if it is not an ISPA member, according to Karl Glassman, L&P's executive vice president. L&P's space rental fees bring more than $250,000 to ISPA in show years, Furniture/Today estimates.
The next ISPA trade show is more than a year away.
ISPA had no immediate comment on L&P's resignation. Earlier, ISPA's Executive Committee sent a letter to its members commenting on the departure of Sealy and Serta.
"While as members of ISPA's Executive Committee we are very disappointed by the loss of these two industry leaders and hopeful that they will decide to rejoin the association in the future," the letter said, "we wanted to give you assurances that ISPA is financially solvent and will continue to move ahead in its ongoing efforts to effectively represent the needs of the mattress industry."
ISPA Chairman Tom LeDuc did not respond directly when asked earlier this month if the loss of Serta would prompt any cuts at ISPA. At that time he said ISPA "has achieved strong financial performance" in recent years and "looks forward to continue to enhance the value of our association."
LeDuc did not respond to questions from Furniture/Today last week asking if the loss of Sealy, Serta and L&P would force ISPA to cut programs or services.
The exodus of major members has occurred in less than a month. On Dec. 30, Serta became the first major to announce its departure. Serta International President Bob Sherman said ISPA didn't help Serta achieve its primary goal of helping its retailers grow their business.
Later that same day, L&P's Glassman said he told Dick Doyle, ISPA's president, that Leggett would not be renewing its membership in ISPA. Neither L&P nor ISPA made that decision public at that time.
On Jan. 19, Sealy CEO Dave McIlquham told Sealy associates that a "careful assessment" of Sealy's participation in ISPA had concluded the cost of membership exceeded the value Sealy received, and that Sealy would leave ISPA. That decision was announced publicly Jan. 21.
Later that day, ISPA's Executive Committee issued a letter to the industry that presented an upbeat assessment of ISPA's value, achievements and outlook. ISPA's Doyle was among those signing that letter.
L&P publicly announced its departure from ISPA on Jan. 26.
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