Bedding leaders expect growth
Gary Evans -- Furniture Today, December 19, 2012
HIGH POINT - The mattress industry is wrapping up a year of unit and dollar gains and will enter the new year looking for more growth, top bedding producers say.
Furniture/Today's survey of the Top 15 U.S. bedding producers found general agreement that 2013 is shaping up as another growth year, possibly even a strong one, as the elections fade into memory and consumers begin going about their normal activities once again.
Most of the Top 15 producers responded to the newspaper's survey, sharing their views of business prospects in the new year.
Collectively, the Top 15 account for the majority of mattress shipments in the country.
The producers cited a variety of causes for optimism, including more product innovation, national advertising investments, a continuing focus on higher-priced and specialty sleep models, growing consumer awareness of the importance of a good night of sleep, and a spike in business in the Northeast from the destruction wrought by Hurricane Sandy.
Some producers said pent up demand will be released in the new year as consumers shake off the uncertainties that surrounded the fall elections.
But they also cited some concerns for next year, including gas and food prices, commoditization of the gel category that could push prices down, and worries about the looming "fiscal cliff."
The International Sleep Products Assn. is forecasting 6.5% unit growth in 2012 and 2.3% unit growth next year, and 10.5% dollar growth this year and 6.3% dollar growth next year.
Here's how the producers responded to the question, What is your overall outlook for bedding business next year?
Bob Sherman, president, Serta: "The industry will experience continued growth fueled by product innovation and national advertising investment. The economy will continue its gradual recovery and this will impact housing, as well as household formation. Growth is likely to be lighter in the first half as the industry is up against big gains from the previous year."
Jodi Allen, chief marketing officer, Sealy: "We are optimistic for the industry next year. With the election past us and the housing market on the rise, we anticipate another modest year of growth ahead of us. We expect consumers will continue to opt for higher-priced products and specialty bedding, and we have aggressive plans in place to offer a variety of sleep solutions that will meet the needs of our consumers in 2013."
Gary Fazio, CEO, Simmons: "I am optimistic that 2013 will be a strong year for the industry. The election is behind us, and there continues to be a lot of pent-up demand for consumer durables. Mattresses tend to be a purchase that consumers feel that they can put off, but they do wear out. After years of waiting, I believe that consumers know they need to replace their mattresses, and the compelling technology available in the marketplace now will move consumers to purchase."
Rick Anderson, president, Tempur-Pedic North America: "Competition in the mattress category will remain vigorous in 2013, particularly in the non spring segment. The rapid commoditization and declining retail prices of gel foam will continue to place pressure on the non spring profit pool, meaning that retailers may realize less top line sales and bottom line profits for the same effort. That's why Tempur-Pedic's new product innovations are designed to deliver higher top and bottom lines. Much in the same way we created the non-spring segment, we will preserve its long term sales and profit viability."
Dave Roberts, president, Comfort Solutions: "The retail side of the business should see a very encouraging increase, while the dogfight for market share will continue amongst the manufacturers. There is a strong change taking place and only those manufacturers that can easily justify their reason for being in the game will be allowed to survive.
"With the election now over, consumers will want to try and return to what was considered ‘normal.' Spending should increase since we've had such a long period of deferment. Housing should also see a reasonable increase, which will be a stimulus for bedding purchases. Depending what happens with our ‘financial cliff,' the Consumer Price Index can be expected to increase 2%-2.5%. If all this goes in a positive direction, the industry should see an accelerated position."
Gerry Borreggine, CEO, Therapedic: "Now that the elections are decided, consumers feel less uncertainty about what the future holds, and will begin to resume their typical buying habits and strategies. That means big-ticket sales, including home furnishings, will begin a slow but gradual uptick."
Kevin Toman, president, Englander: "With the elections over and if we do not fall over the cliff due to lack of compromise in the government, the bedding industry should have solid growth in 2013. The economy is growing slow but steady and consumer confidence is becoming stronger."
Frank Hood, CEO, Kingsdown: "Short strokes of improvement in the economy: positive news on unemployment; housing starts are up; mortgage origination is on the rise; and the whiff of compromise in Washington on the economic cliff talks, all lead me to believe we will see hikes in both units and dollars in 2013.
"We have a very strong footprint in the Northeast and we have been working closely with our customers there to help the victims of Hurricane Sandy. Since Sandy plowed through, we have seen an increase in business in replacement mattresses and we anticipate this will continue at least through the second quarter of 2013."
Ron Passaglia, president, Restonic: "The overall outlook for the bedding business should be stable with the continued improvement in the economic conditions. Naturally the condition of housing starts and jobs will have a large impact on the rate of bedding sales. The real question is, ‘Is there some pent-up demand that will flow back to the market place?' The $599 to $999 price points may see some strong resurgence."
Rick Robinson, president, Spring Air: "In the aftermath of the election, I believe we'll see modest growth because of pent-up demand Much of that growth will be market sporadic, however, as some regions of the country continue to have challenges while others are rebounding well. What we need to see is growth that is both widespread and sustained."
Mike McQuiston, vice president, Symbol Mattress: "With the elections finally behind us and new housing starts forecasted to rise, I am optimistic about 2013. Should gas and food prices stabilize and potential tax increases be limited, it could be a very good year for our industry."
Earl Kluft, CEO, E.S. Kluft & Co.: "I believe that 2013 will be a better year for the industry as a result of pent up consumer demand , housing starts gaining some traction and a rise in average unit selling price led chiefly by luxury and specialty products. There is an evolution with consumers taking place. They are increasingly recognizing the value of a good night's sleep to their overall health, and they are willing to invest in a quality, luxurious mattress.
"Lastly, though it's a sad way to see an increase in business, the rebuilding from Hurricane Sandy will also help to boost sales. We anticipate this and are making plans to accommodate this growth in our new Pennsylvania plant."
Steve Russo, CEO, Southerland: "Consumer confidence should be the leading indicator again. Assuming a successful resolution of the impending ‘fiscal cliff,' businesses should expand, create jobs and result in an upbeat outlook for 2013."
Industry Related Content
Most Viewed Articles
FTTV: Frontline Friday From F/T