AT THE MARKET — In the midst of a quiet market and a sluggish retail sales climate,
senior bedding executives here have mixed views on the outlook for bedding in the new year.
Some said they see favorable trends for the industry, such as the consumer’s willingness to spend more on better bedding, continuing in the new year. But others said they see an extremely tough year on the horizon, with little or no real growth in the cards.
“Units will be sluggish,” predicted Philip Dobbs, senior vice president of marketing at sales leader Sealy. “The trend of investing in higher-quality mattresses will still be there.” He sees a fight for business in 2014.
Tim Oakhill, senior vice president of marketing at Simmons, feels that better days are coming. “I feel a momentum shift,” Oakhill said. But he also noted that Simmons, enjoying a strong sales year, has “brought momentum to the category.”
Brian Akchin, president of Fraenkel and an Englander licensee, sees a flat year for units in 2014. “I think sticker shock will hit with the addition of fire-resistant bedding in the second half of the year,” he said. “We will find that when prices go up $100 at retail, it will scare some people off.”
According to the bedding industry’s trade association, the International Sleep Products Assn., better days lie ahead. In its latest forecast, issued this month, ISPA sees moderate unit gains next year and in 2015. Dollar gains will be stronger, ISPA believes.
Reflecting the tough year that has gripped the industry, ISPA sees only a slight uptick in unit shipments for 2013, a gain of just 0.5%. That would mean a year of essentially flat unit growth. Units were up 4% last year, and will be up 3% in 2015, according to ISPA.
The dollar growth of 7.5% this year is a reflection of the growing volume of high-end products being shipped, ISPA said.
Dollar growth should be stronger next year and in 2015; ISPA forecasts an 8.5% dollar gain in 2014 and an 8% increase in 2015.
Furniture|Today’s forecast for 2013, issued last December, envisioned unit growth of just 0.2% and dollar growth of 7.4%. The newspaper will issue its 2014 forecast late this year.
The ISPA and Furniture|Today forecasts portray an industry that remains on a growth track, however modest the unit gains may be. That is good news for an industry that hasn’t had a down year since 2001.
But some veteran bedding executives, whose companies show here, aren’t so sure that the new year will bring much of an upturn.
Ed Scott, president of Stylution USA, sees a flat year in 2014. He believes the addition of fire-resistant products, which will bring higher retail prices, will impact volume, and predicted that some smaller producers won’t survive that change.
Scott also believes the industry is getting away from high-volume price points. “I think the industry is leaving a lot of consumers behind by focusing on the upper-end so heavily,” he said. “We’re making a postponable purchase that much more postponable.”
Neal Grigg, president of Carolina Mattress Guild, sees 2014 as being “as flat as can be.” In recent months, he said, there has been “a dramatic slide in business at retail. What is out there that will bring a change? The housing market won’t turn around for a while.”
At CMG, he said, “We are taking the approach that it will be a hard-fought war to maintain volume, much less achieve growth.”
Said Thad Pettyjohn, vice president of sales at Jamison: “I don’t think the industry will be up by 5% in dollar growth next year. Units will be up no more than 1%. What will cause the real estate market to rebound? The only way to grow the business is to take it from someone else.”
Pettyjohn said Jamison continues to enjoy double-digit sales gains “strictly by the services and products we provide.”
Marc Werner, CEO of United Sleep, says retail “is very quiet across the country. I think a consumer durables recession is under way,” he said. “It started in mid-March and is a byproduct of the full-closet syndrome.”
Werner believes the industry is “bouncing along the bottom” of the durables recession now, and will experience better days next year. “I think next year will be a good year,” he said. “The year will be good to people who appreciate the changing dynamics of the market.”
