Question: Do you think Chinese-made bedding will be a significant force in the U.S. market this year?
By Furniture Today Staff -- Furniture Today, February 21, 2005
"Although they are improving their packing and shipping processes, the benefits of lower Chinese wages are still not outweighing the transportation costs. I suspect that they will make some inroads into the all-foam mattresses and the lower-end innerspring mattresses, but we don't anticipate it to be a major factor in 2005."
Stuart Carlitz, president, Eclipse International
"Chinese-made bedding is a significant force, but will it dominate a major percentage of the market? Probably not. It simply hasn't made the inroads. You will see some manufacturers reacting because of fear. An analogy: 'I'm not sure this snake is going to harm me, but it's going to make me harm myself'."
Eric Hinshaw, CEO, Kingsdown
"No. I believe that U.S. mattress flammability standards and other issues such as next-day service will slow down the impact of Chinese imports, at least for the foreseeable future."
Bob Sherman, president, Serta International
"I don't think it will be significant in 2005. The domestic manufacturers haven't figured out how to embrace China and make it an asset and not a problem. At this point, we can't get the kind of economies of scale that would justify bringing in finished goods from China. If China becomes a significant opportunity, it would affect how we do things in the bedding industry."
David Roberts, executive vice president, King Koil
"I believe Asian product will consume some low-end units this year. I don't know what the impact will be, but we cannot deny their existence. I would think they would be a concern for low-end manufacturers and suppliers to the buying clubs."
Bob Hellyer, president, Simmons
"Chinese products will continue their inroads into the U.S. market. The big story over the next several years will be the growth of specialty products that are coming from overseas."
Bob Naboicheck, president, Gold Bond
"Chinese bedding already is a factor. Chinese bedding will keep the lower-end bedding prices from growing."
Dave Fogg, president, retail division, Tempur-Pedic
"I'm not sure that its impact will be significant in 2005. Thus far, the total package — that is, the finished product, the look, the feel and the freight — hasn't provided a significant threat to U.S. manufacturers. However, China has shown itself to be a quick study, so changes to the product and how it arrives here could come quickly. Still, I believe the Chinese will have a more significant impact as components suppliers than as finished-goods vendors."
Gerry Borreggine, president, Therapedic
"Although I believe the Chinese will have an effect on the industry, the feels and the logistics (of Chinese-made bedding) have not been completed. Therefore, they are not positioned for a total impact in 2005."
Kevin Toman, CEO, Restonic
"I think components from overseas are getting more important. I think that part of the business will continue expanding, because prices in the U.S. continue to escalate and so producers are looking for better prices on raw materials. As for finished beds, I don't see that becoming significant soon. Retailers would have to be looking for that and driving that business. Retailers are looking for profit and aren't looking just to sell low-end products."
Daryl Tarbutton, president, Bemco
"I do not believe that Chinese-made bedding will be a significant force in 2005. The mattress industry is an industry that operates without a backlog. The normal order cycle is five days or less. The existing mattress industry is leading the home furnishings field in delivering quality products, great retail margins and a growing average unit selling price. Labor is a very nominal percentage of our cost of goods and therefore is easily offset against higher shipping costs from China.... Significant shifts in purchasing patterns will take much longer than one year to develop. Ask this same question again at this time next year!"
Jimmy Orders, president, Park Place Corp.
"Retailers understand that their most profitable category is based on both margin and turns. While the Chinese beds do offer the margins, they are not at all competitive with domestic producers when it comes to turning profit dollars. Currently, there is not anyone on the scene with the infrastructure to make Chinese bedding profitable enough to retailers to make it a significant force in 2005. Massive warehousing and major floor placements will have to take place before finished goods of Chinese imports become significant."
Kerry Tramel, president, Lady Americana
"Domestic bedding manufacturers can keep the imports at bay, provided they are up to the challenge of providing the same type of value represented for retailers' special events. This will keep the barrier up to protect the bedding industry from the onslaught of imports. I would suggest to any retailer that before they put themselves into a precarious position (with imports) that they go back to their current bedding supplier and ask for a 'special purchase' when they determine what they need. I'm sure each of the domestic manufacturers will rise to the occasion to keep the imported competition at bay."
Thomas Nieman, vice president of sales, United Sleep Products
"Chinese bedding, like it or not, will be a growing factor. As a company and an industry, we cannot afford to not treat this as a major change in the way we do business. Chinese bedding and/or Chinese components can be like a Wal-Mart to the bedding manufacturers. The problems of supply and just-in-time delivery are simply temporary obstacles to be overcome. I believe we will see a major retailer, possibly in conjunction with a bedding manufacturer, who will look into sourcing direct within the year."
Neal Grigg, president, Carolina Mattress Guild
"China will continue to grow as a factor in the U.S. bedding market, but 'significant' is probably too strong. We have the largest and most profitable bedding industry in the world, so it is logical that Chinese and other manufacturers who are trying to grow and improve their selling mix and margins would look at North America as a potential market. Further improving the efficiency of our just-in-time supply chain, controlling costs, and continuing to invest in product innovation and brands is a key to success for domestic manufacturers in the future. Conversely, Sealy continues to be attracted to the domestic opportunity for selling beds in China. The market there is growing rapidly, like the Chinese economy in general, and offers great long-term potential for a global company like Sealy. Our challenge at Sealy is to maximize our current opportunities and initiatives in the North American and European businesses before focusing beyond our current markets."
Dave McIlquham, CEO, Sealy
"I don't think it will reach the level of being significant in 2005. By 2010, it has the potential to be significant. My view is that Asian manufacturing has had a significant impact on the U.S. case goods industry. Asian upholstery producers have had a significant impact on the U.S. market. If the Chinese can make that impact with a sofa, why can't they do it with a mattress? But there are some barriers they must overcome, including the length of time it takes them to develop bedding programs."
Jim Nation, president, Spring Air
