High debt levels, poor sales taking toll in mattress arena
Here’s a real-world challenge for you: A reporter for one of the country’s great newspapers (hint: two of its reporters found fame in the Watergate scandal) calls and asks about the state of the mattress business these days. What do you say?
A. “No comment.”
B. “Why are you reporters always looking for bad news?”
C. “The industry is cautiously optimistic about a rebound
in 2010.”
D. “We are in the middle of a really, really horrible year.”
Before I give you the correct answer to that question, which was posed to me the other day by a reporter for The Washington Post, let’s take a few moments to consider where we are as an industry these days. Short answer: It’s ugly out there.
The recent Chapter 11 filing by Mattress Discounters of Upper Marlboro, Md., was unwelcome news for an already jittery industry. Simmons gets a major haircut there, it appears. And that ever-active industry grapevine suggests another major mattress retailer could be the next to file. On the wholesale side of the business, there are rumors that a couple of big players are struggling.
The debt levels on both the manufacturing and retail sides of the industry are significant, one bedding leader recently told me. And this poor sales climate gives everyone much less room to maneuver.
Steve Newton, CEO of Mattress Discounters, explained the company’s plight this way: “I think it’s all driven by the current economy we face. People are not buying mattresses. They’re not buying any furniture goods, and they’re not buying mattresses in particular.”
That’s what Newton told The Washington Post reporter who wrote a story on the bankruptcy filing. That same reporter called me and asked for my perspective on the filing, and on industry conditions in general. And that led me to offer the comment about the “really, really horrible year.” Yes, “D” is the correct answer, or at least it’s the answer I gave. Hey, what can you say to a question like that? It’s never a good idea to dodge a question. Honesty is always the best policy when answering reporters’ questions. Trust me on this.
I was also asked about the Discounters filing by a reporter for Distressed Debt Report, a financial publication. Frankly, I didn’t even know there was a Distressed Debt Report, but that call is another sign of the times. I bet the reporters for that publication are pretty busy these days.
Is there any good news out there?
There are some winners, but there are more losers these days, I think. Let’s face it: We are in a time of turmoil. True, this is a prolonged slump. But historically our industry has been a strong performer. We just need that history to start kicking in, one of these years.
amymed2@yahoo.com commented:
I have been trying to get a mattress that is not defective since Aug 2007. It is not Oct 2008. Anything I have gotten from a price range of $700 to $2000.00 has been defective. I was told when I called the store of my most recent purchase that all mattress's were now made in China. I am going to have to believe this seeing they are only finished on one side,end up having depressions of more that 3 inches on the sides that you have to sleep on and then fall into the middle like a large taco. I have even replaced my metal bed frame twice. This is totally unacceptable. Are there any American Made Mattresses out there anywhere. My next resort is a plain old cot.
Warren Littrell commented:
It is pretty evident that the current advertising venues are not working with the consumer. All we have heard about for the last 20 months is change. So as Albert Einstein said "Doing the same thing over and over and expecting a different result is "INSANITY". What do we have to lose?
King Size commented:
In Denver with Denver Mattress???
Lisa S. commented:
John Bassett? Is that you down there??
The American bandwagon is a great idea, BUT... We need customers. Dave, you don't have a magic wand we can borrow do you? Or know some special mattress dance?
BUSINESS IS TERIBLE! commented:
I HAVE BEEN IN THE RETAIL MATTRESS BUSINESS IN DENVER FOR THE LAST 18 YEARS. I HAVE NEVER SEEN IT THIS BAD! SLOW IS ONE THING, BUT SALES ARE VIRTUALLY NON EXISTENT! IF IT DOESNT PICKUP FOR THE HOLIDAYS NO ONE WILL BE LEFT!
King Size commented:
Not only major bedding manufacturers make mattresses with American components so do small businesses like mine. Alot of the majors import components from China because they are big enough to do so directly. Leggett also has component factories in China.
karreemII commented:
we will see more industry fallout here in the near future
Warren Littrell commented:
Ads campaigns telling te American consumer that a retailers mattress are "Made in America" with American components seem to be an effective way to reach the consumer. It was done after September 11 with ads that carried an American theme. It worked then and it will work again. One things many Americans are concerned about is the loss of American jobs and the glut of goods coming in from China. The furniture industry in this country is complicit in this as evidenced by the case goods industry. Retailers and suppliers should be proud that our major suppliers of mattresses are made in America with American components.
King Size commented:
Lets face it, most of us here have been saying that business has been bad for the longest time its just taken a little longer to get to the east coast mattress industry. The West coast is more competitive because there are so many manufacturers. If we were to get together and form a group of American manufactures (NOT ISPA) that promote American made mattresses using quality components at realistic and fair prices then we would be a little better off in the long run. Instead of trying to reduce or maintain current prices by take quality out of our mattresses we should instead be educating the consumer and letting them know that we are also paying more for our components. We are after all federally regulated just like most other consumer products. Money is tight right now so the last thing you want to do is sell a low end mattress and have it returned in a few months and tarnish your reputation.
