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Bedding folks know how to get value story across

Jerry Epperson -- Furniture Today, March 20, 2005

Bedding sales last year were up 10.4% in dollars, 3.5% in units. Why the difference? First, as you might remember, there were a lot of raw materials cost increases in 2004. Steel and other metal prices spiked upward. Anything petroleum-based, like foam, fabrics and, of course, transportation, rose dramatically. Some of these were passed along to the consumer.

Second, some of the costs of meeting the 2005 California flammability standard added to costs in 2004. But the ongoing reason for at least half of the difference between dollars and units is a combination of two factors, size and luxury.

Retailers have for years been selling fewer of the smaller twin and full sizes and more of the queen and king sizes. The best-selling size is a queen, even though we didn't offer a queen size until the 1960s. Part of this is because of the increasing width of our population, as Ben and Jerry continue to attract more followers than Jenny Craig.

And part is because most new homes and apartments are being constructed to handle these very popular larger sizes of bedding. Also, vacationing couples enjoy these bigger beds in hotels, then fly home and run out to get them.

But the accelerating factor in the last several years has been the move to more luxurious bedding. Today, in some markets, you can pay more for a bedding set than you would pay for some cars. Of course, the bedding set will last longer, offer greater comfort, and be used more.

Sets selling for $10,000 and up are still rare, but gaining momentum. As seen at Jordan's new store north of Boston last year, segregating the ultra super-duper ritzy bedding in an area to itself with specialized sales personnel brings home the difference.

We have always admired the bedding industry for its constant innovation, speedy deliveries, consistent quality, recognized brands and, importantly, its ability to give bedding retailers a store-high GMROI year after year. But now, with this ability to move the consumer to bigger and bigger tickets, bedding makers deserve even more praise.

After several years of giving the consumer better furniture for less money, the rest of the industry needs to learn a lesson from the mattress makers. In autos, apparel and other products, the consumer is stepping up when they perceive the value and understand the story. Our value story is without peer, so how do we get the story across?

By the way, we hear there's going to be a huge 75%-off sale this weekend in your town with no down payment, no interest and no payments until 2010. Don't miss it!

Author Information

W.W. "Jerry" Epperson is a managing director of Mann, Armistead & Epperson, 119 Shockoe Slip, Richmond, Va., an investment banking and research company that specializes in the furnishings sector. The company is affiliated with Ferris, Baker Watts, a full-service brokerage headquartered in Washington.

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Bedding folks know how to get value story across

Mar 21, 2005

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