L&P innersprings gaining share as mattress industry struggles
It’s no surprise that components supplier Leggett & Platt is experiencing extremely weak demand in nearly all the product categories where it does business, but the company did see growth in one of its signature products — mattress innersprings — in the first quarter.
Leggett’s U.S. innerspring sales were about 5% ahead of last year’s first quarter, and considering that mattress industry sales are down double-digits year-to-date, it’s a clear indicator the company is gaining market share.
Karl Glassman, executive vice president and chief operating officer, believes the gains are coming at the expense of specialty sleep producers.
“We’re certainly picking up market share from the pure-play alternative sleep products that are higher priced,” he told securities analysts during a Thursday morning conference call.
Glassman didn’t mention Tempur-Pedic and Select Comfort by name, but I don’t know of any other “pure-play alternative sleep products that are higher priced” with a significant presence in the mattress market.
Those two companies have been gnawing away at the innerspring market for years, but the recession may provide the best opportunity for Leggett, by far the largest innerspring supplier, to take back a big chunk of what it has lost.
The reason? Consumers appear to be gravitating toward price points under $1,000 in queen — market segments where Tempur-Pedic and Select Comfort have little or no presence.
“Our customers have (downgraded), to a degree, and are selling lower-priced goods,” Glassman told the analysts.
Glassman, by the way, believes the mattress industry is down about 20% year-to-date. The International Sleep Products Assn. says mattress sales were down nearly 18% through the end of February.
Steve commented:
Leggett played this one beautifully but they are now paying the price by spreading themselves too thin. The Verticoil is a good product but they could give their customers alot more for the money literally. Thats the good thing about imported springs, they are cheap, well made and make for a nice looking bed. They are not as hard to find as most people say, you just gotta know where to look :o)
bob b commented:
Perhaps adding an onerous duty on imported springs
thus adding incremental costs to many mfrs has helped LP but damaged the industry
CF commented:
Might thier increase in units also be because there are less imported springs?
Lisa S. commented:
They new spring unit they have been releasing (I don't really know how new it is, but they suddenly sold it to everyone at the same time) is fantastic. I know lots of manufacturers that have been producing new low end with that unit (of course the number escapes me). I think everyone went back to the drawing board in the past few months, which is great for Leggett and Hickory.
