Some producers expect mid-price resurgence
December 20, 2013,
David Perry - Executive Editor
What struck us, in looking over those comments, is that expectations tend to be on the modest side, with a number of producers calling for only slight gains and predicting another rollercoaster ride for the industry.
Gary Fazio, CEO of Serta Simmons Holdings, is on the optimistic end of the spectrum, forecasting "a strong year for us and the industry." But Rick Anderson, executive vice president and president, North America, of Tempur Sealy International, sees "continued modest growth," a theme that a number of other producers echo in their comments.
King Koil President Dave Roberts sees the new year looking a lot like the current one.
Therapedic President Gerry Borreggine has some interesting comments on the impact consolidation will have on producers and retailers. Spring Air President Rick Robinson sees consolidation leading to a rise in average unit selling prices.
Speaking of prices, we were especially interested in the comments about a possible resurgence of business at price points from about $1,000 to $1,500, give or take.
Restonic President Ron Passaglia expects a decrease in business at $1,500 and up and an increase in sales from $899 to $1,500, while Kingsdown CEO Frank Hood sees "much more action" in the $1,200 to $1,799 range than in recent years. Diane Adams, chief marketing officer at FXI, looks for "more action at the $1,000 to $1,500 price points in 2014."
While those producers single out slightly different price bands for improved sales next year, they all see strength in some price points between $1,000 to $1,500. That would be a welcome development.
But Jamison's Ken Hinman, senior vice president of sales and marketing, has a cautionary prediction, asserting that as much as 70% of bedding sales next year "will remain in the promotional price range of from $499 to $999."
How all of the various economic and industry dynamics will play out next year is, of course, the $64,000 question. Yes, there are some positives - the housing market, employment and the stock market come to mind - but there are also negatives, such as skittish consumers and more potential budget battles looming in Washington.
We do know that the industry will be headed to the Las Vegas Market next month loaded with new mattress and specialty sleep lines. That market should be another bedding blockbuster. The producers will certainly be doing their part to drive business in the new year. From there, it will be up to retailers to do their part to excite consumers about the value of a new sleep set.
In this last regular issue of the year, we close with our best wishes to all of you who join us here each week. May you have a healthy and happy holiday season, full of good cheer, warm beverages (I favor chai tea), and the love of friends and family.