L&P doubts ISPA stats
By David Perry -- Furniture Today, October 3, 2005
High Point — Is the U.S. bedding industry enjoying a growth year, or have unit shipments headed south?
It depends on whom you ask.
According to the International Sleep Products Assn., which publishes industrywide statistics, units were up by an estimated 3.4% for the first five months of 2005, and dollars were up an estimated 12.4%.
But according to the bedding industry's largest component supplier, Leggett & Platt, unit shipments in that period were down, perhaps by as much as 5%.
Top Leggett & Platt officials have gone public with a detailed criticism of ISPA's numbers, which they said present an inaccurate view of the industry's performance.
Leggett & Platt Chairman Felix Wright told analysts in a conference call the "data coming out of ISPA relative to innerspring markets ... is certainly flawed." He encouraged analysts to call top bedding producers and get their sales data to compare to ISPA's figures.
Karl Glassman, executive vice president of L&P and president of the company's residential furnishings operations, presented a detailed analysis of what he said were problems with the methodology ISPA uses to make its estimates. ISPA's sample size is too small and its extrapolations on overall industry performance are off base, he said.
ISPA Chairman David Orders declined to respond directly when asked about the L&P criticisms. He issued a lengthy statement summarizing the 20-year-plus history of ISPA's statistics program, which he said "has evolved in response to the needs of members and all interested parties."
He also said that an independent audit conducted in 2003 "verified that the ISPA program is well grounded in statistical sampling theory and computational methods and is being conducted appropriately."
In addition, Orders said that ISPA "has and will continue to invite input and dialogue from all industry constituents" on its statistics program.
Glassman said that ISPA assumes the rest of the bedding industry is growing at the same rate as the 19 producers who submit sales data to ISPA for the association's monthly Bedding Barometer reports. But not all producers are, in fact, growing at that rate, he said.
The ISPA report also assumes the market share represented by the 19 producers in the sample remains constant throughout the year, and Glassman said that assumption also is out of touch with reality.
He also said it is not possible that soaring specialty sleep sales are strong enough to push the overall industry unit shipment numbers well into positive territory.
"So the numbers don't add up," he said.
Like Wright, Glassman encouraged analysts to contact leading bedding producers. "They are offended by the data published by the industry association," he said. "A couple have made comments that it must be another industry" that ISPA is reporting on.
Spring Air President Jim Nation, asked to assess ISPA's monthly reports, responded, "I am not yet comfortable with those reports."
Eric Hinshaw, CEO of Kingsdown, said Leggett & Platt has a great deal of credibility in discussing mattress shipment numbers.
ISPA said its Bedding Barometer reports present data from a sample of "19 leading U.S. mattress producers that participate every month in the ISPA shipments survey."
The estimate for total industry figures "is calculated by grossing up the sample of 19 participating companies to a projection for the entire industry and applying the percent changes that occur over each of the 12 months of 2004," according to the report.
Manufacturers who participate in the survey include Sealy, Simmons, Spring Air, Select Comfort, Tempur-Pedic and Kingsdown. ISPA said the survey sample represents 48.6% of industrywide unit shipments.
The unit and dollar growth rates for the sample in the January-May period, and the estimates for total industry performance in that same period, were the same in the ISPA report.
ISPA's latest monthly report, covering January through July, estimates that units are up 2.5% in the first seven months of 2005, with dollars up 11.1%.
