Readers choose Furniture/Today's Top 10 online stories
Spring Air bankruptcy tops list
Heath E. Combs -- Furniture Today, December 21, 2009
HIGH POINT — If there was a topic that engaged Furniture/Today's online readers in 2009, it was the Spring Air bankruptcy and shutdown that took many by surprise after a management buyout failed.
Three of the 10 most-read online stories of 2009 were related to Spring Air's bankruptcy, its treatment of employees after the factory closures and the efforts by new entities to keep the company running.
Here's a countdown of our 10 most-read stories of 2009.
Feel like online retailing isn't a taboo subject in the furniture industry anymore?
One of the year's biggest stories reported that online furniture sales totaled $4.6 billion in 2008, representing about 6% of total U.S. consumer spending on furniture and bedding.
The story also reported that 20 online-only home furnishings retailers sold about $1 billion worth of furniture during 2008.
It also said that Furniture/Today and HGTV's 2009 Consumer Views Survey found that 44% of adult U.S. consumers have purchased home furnishings online, with occasional tables, entertainment furniture and youth furniture as the leading product categories.
9. Former Spring Air CEO: I didn't send letter, May 14
Shortly after the disorderly closure of Spring Air, its last CEO, Steve Cumbow, wanted to distance himself from the controversial last letter sent to the company's workers.
The May 7 letter was addressed from "The Board of Directors and Management of the Spring Air Companies." It told employees their health insurance was cancelled at the end of April, they would not be paid for unused vacation or unused paid time off, and they would not be reimbursed for business expenses already incurred.
Cumbow told Furniture/Today he was no longer employed at Spring Air when the letter was sent and that he didn't support its contents.
"I would never support a letter like that. In my view, we had an obligation to do what we could for employees who worked so hard for the company," he said. "I don't treat people that way in my personal life. I don't treat people that way in my professional life."
Cumbow, who said he left the company May 5, believed the letter was sent by American Capital, then Spring Air's owner.
Another popular item on this topic was a blog entry by business editor Larry Thomas, "Spring Air Employees Treated Like Lumpy Mattresses," that received 49 comments from readers.
8. Jordan's scores big with 'Power Play,' Aug. 31
With an uncertainty around consumer financing this year, many retailers were looking for exciting promotional ideas for their stores.
Boston-area retailer Jordan's Furniture and Los Angeles-based electronics retailer Paul's TV drew great interest for a promotion called Power Play that featured a 13-piece living room package plus 65-inch Mitsubishi HDTV for $1,999.
It turned out to be one of Jordan's best promotions in years, getting a response comparable to its Monster Deal in 2006 that offered free furniture if the Boston Red Sox won the World Series. The retailer reported selling thousands of Power Play packages.
"Everyone is trying to find a home for this package," Josh Tatelman, vice president of merchandising said in the story. "Everybody comes in and says, "What's the catch? This can't be.' But there is no catch. It is what it is and you should find a place for it in your home."
Jordan's, also a part of Berkshire Hathaway's furniture division and Paul's TV kicked off their new relationship earlier in the year, when Jordan's soft-opened Paul's TV departments, ranging from about 1,500 to 4,000 square feet, in all four of its Boston-area stores.
Paul's TV put a "store within a store" in Jordan's with its own management team, sales force and warehouse staff responsible for electronics transactions.
Who doesn't enjoy watching the Oracle of Omaha share advice on business?
Furniture/Today posted three videos of billionaire investor Warren Buffett talking about industry issues as part of opening ceremonies for the renovated Homemakers Furniture store, part of Nebraska Furniture Mart, owned by Buffett's Berkshire Hathaway Inc.
In late July, Homemakers held a grand opening of its renovated Urbandale, Iowa store that drew 2,000 guests, including a large swath of the furniture industry.
Buffett shared his views on the future of the CIT Group, why Homemakers spent $30 million on an expansion and why he believed the housing and furniture markets would rebound.
6. DeCoro closing down leather production, Jan. 16
A couple weeks into 2009, news of leather upholstery producer DeCoro's abrupt closing left many wondering whether other suppliers would fail in the wake of many retail closures in 2008.
In the late 1990s, DeCoro made a revolutionary move by basing leather upholstery operations in China, producing Italian-style seating in two facilities totaling 2.9 million square feet. At its peak in 2006, DeCoro had global sales of about $300 million.
But the company lost big retail accounts with the closing of Levitz, Wickes and others. In late 2008, a refinancing agreement with China Construction Bank looked like it may save the company.
Then in January, the report surfaced that the company had shut down its factories. The district government in Shenzhen later said it had paid the equivalent of $1.46 million in back wages to about 2,000 former employees.
By March, just about all that remained of DeCoro was an accountant at the company's U.S. sales and marketing office in High Point as the company wound down operations.
Reports later circulated that DeCoro CEO Luca Ricci was exploring the viability of operating an entity in the U.S. or restarting the business elsewhere. To date, no new venture has been announced.
After the collapse of Spring Air, three independent licensees located in Greensboro, N.C., Cameron, S.C., and Grand Rapids, Mich., continued normal operations.
In June, longtime Spring Air executive Ed Bates announced he would re-launch the brand under a new entity, Spring Air International LLC, and named bedding veteran Rick Robinson to head the venture.
It acquired the mattress brand, reacquired and reopened the Chelsea, Mass., Spring Air factory, and purchased the global rights to Spring Air's brands and other intellectual property through Spring Air International LLC.
The new distribution network included the three Spring Air independent licensees whose factories remained in business after the corporate plants closed.
Executive compensation was under close study in 2009. The year started with news that former Merrill Lynch CEO John Thain rushed to pay out billions in bonuses just before the brokerage was acquired at the end of 2008 by Bank of America (both companies had received government aid), and the operations of Bernie Madoff and R. Allen Stanford had just been exposed.
In early March, Furniture Brands International announced it had awarded top executives collected more than $10 million in incentive awards for 2008.
The awards were a shock to many who believed FBI execs were acting in their own interest as the company's stock went into a freefall during 2008, going from a high of $15.23 to about $2.50 by the end of December.
During the month the awards were announced, the stock reached a low of 69 cents. (It has since rebounded to a little under $5.)
The parent of Broyhill, Lane, Thomasville, Drexel Heritage, Henredon and Maitland-Smith reported a loss of $373.6 million in 2008 as sales declined 16.3%, to $1.7 billion.
Raymond James analyst Budd Bugatch wrote in a report that the steep compensation was an example of how FBI's top executives were acting in their own interest, rather than that of shareholders.
The company defended the payments, saying they were part of a long-term incentive plan based on free cash flow that was approved in 2006.
Little information has surfaced on why Georgia furniture retailer Jay Weinberger committed suicide after an incident involving a stolen trailer. His family is the owner of Weinberger Furniture and Mattress Showcase, a family owned business with stores in Augusta and Greensboro, Ga.
2. Universal Furniture To Roll Out Paula Deen Home Line, March 16
Yes, 2009 was a big year for licensing.
While Ralph Lauren, Nautica, Nickelodeon and Southern Living, among others, had big news as licensors this year, Universal - after making a big splash with Better Homes and Gardens in 2007 - made another big leap with Paula Deen Home.
The celebrity cook, host of "Paula's Best Dishes" on TV's Food Network, visited the spring High Point Market to show a collection of casual, comfortable indoor furniture that included bedroom, dining room, home office, home entertainment, accent furniture and upholstery.
To create the line, Universal staffers visited Deen's home in Savannah, Ga., to learn more about her sense of style and found a broad mix of pieces that inspired the line.
In the story, Deen described her audience as "everybody who was raised where there is a lot of food and love."
1. Spring Air Likely To Cease Operations, May 5
In 2006, Spring Air celebrated its 80th anniversary. Three years later, in May 2009, the bedding major abruptly announced it would cease operations at its nine factories after a management buyout failed.
The story generated a lot of interest, partly because of the way employees were treated during the closure. In a short letter, Spring Air management said it wouldn't pay workers for unused vacation time and wouldn't reimburse business expenses even if the expense reports had already been submitted.
(For more, see Top Read Story #9)
A class action suit against the company from a former employee, claiming that management failed to adequately notify employees of the pending shutdown, is still in court.
Consolidated Bedding and its affiliated entities, which operated as Spring Air, would file for Chapter 7 bankruptcy liquidation. A new company, Spring Air International, re-launched the Spring Air brand not long after the filing.
Two of the most read stories of the year weren't even written in 2009. They weren't even hard news stories either. They were, however, written on the same topic - bonded leather.
Both stories, "Bonded Leather Making Headway," and "Opinions Mixed on Bonded Leather," dealt with the reception the material gets from consumers, and the love/hate relationship industry insiders have with the material.