Share this on

Simmons sees solid 2nd half

By David Perry -- Furniture Today, August 21, 2005

Atlanta — Bedding major Simmons has regained "some of the sales momentum" in its wholesale bedding segment and is encouraged about business prospects in the coming months, said Chairman and CEO Charlie Eitel.

He said a revamped product line and key Simmons placements at a major national bedding retailer will give the company a boost in the coming months. "We do expect to have a solid second half of the year," Eitel said, repeating a view expressed earlier.

Overall, Eitel said Simmons was "pleased" with its second-quarter financial performance, which saw a 3.1% increase in sales. Wholesale bedding segment sales increased 2.6%, largely due to the addition of $6.2 million in sales of juvenile products as a result of an acquisition last year.

Conventional bedding sales, which posted a double-digit decline in the first quarter, remained in negative territory in the second quarter but showed significant improvement, declining just 0.5%.

Conventional bedding unit shipments, down 15.2% in the first quarter, were down 7.4% in the second quarter, Simmons said. A 6% increase in conventional bedding average unit selling price helped offset the second-quarter unit declines.

In the first six months, wholesale bedding segment sales decreased 3.2%, primarily due to an 11.4% decline in conventional bedding unit shipments, the company said. The wholesale bedding segment's gross margin was 42.3%, down from 44.8% in last year's first six months.

Eitel said that Simmons' revamped product lines, designed to add more value at key price points, are being well received by retailers. He also noted that Simmons gained significant placements at Houston-based Mattress Firm, the third-largest U.S. bedding retailer. He said Simmons gained those placements at the expense of Spring Air, and is now positioned to compete more aggressively against other vendors on the Mattress Firm floor.

He offered this overall assessment of the company's current offerings: "Our product line is hot, it's selling, and it's competitive."

Asked about the performance of the HealthSmart line, which features a removable, washable mattress top, Eitel said: "HealthSmart is doing just fine." He noted that while the product did not meet the company's initial expectations, its sales are of the size of a Top 10 bedding company in their own right.

Eitel said that while Simmons made progress in the second quarter, the company is still far short of its financial goals.

Share this on

Simmons sees solid 2nd half

Aug 22, 2005

Also by this author

Also by David Perry

Featured Company

Brandwise Inc.

Brandwise serves a model - not just an industry - by integrating, automating, and optimizing the entire sales channel, from wholesale Suppliers to their Reps and the Retailers they service. In short, our software helps Reps and Suppliers sell more and create... more