Bills pending in several states could impact mattress industry
Many state legislatures are considering measures that could impose added costs and burdens on mattress producers.
Bills are pending in at least 14 states to ban certain chemicals—mainly lead, but also phthalates, cadmium and bisphenol A—from children’s products. One such bill that recently passed in Maryland would set the state’s lead standard equivalent to what is being considered in the pending federal CPSC Reform Act, but the state’s definition of what is a children’s product is not identical to the definition used in the federal bill.
Other state proposals would set different chemical bans for consumer products or require manufacturers to substitute more environmentally friendly materials for existing materials. For example, Maine has passed legislation to expand its existing ban on FR materials known as deca–PBDEs.
Other state bills seek to enforce new product–recall obligations on companies that are not required under federal law.
The International Sleep Products Association is working with other manufacturing groups to defeat or modify these state efforts and to add provisions to the pending CPSC Reform Act that would prevent states from taking actions inconsistent with federal requirements.
CPSC reform goes to committee
The U.S. House and Senate both have passed versions of bills to reform the U.S. Consumer Product Safety Commission. Because the measures are substantially different in a number of important respects, representatives from each chamber now must convene in a Conference Committee to develop the final compromise bill.
The Senate has begun the formal reconciliation process by appointing its representatives to the committee. They are Sen. Mark Pryor, D–Ark.; Daniel Inouye, D–Hawaii; Amy Klobuchar, D–Minn.; Barbara Boxer, D–Calif.; Ted Stevens, R–Ala.; John Sununu, R–N.H.; and Kay Bailey Hutchison, R–Texas. Pryor, the sponsor of the Senate bill, likely will lead committee discussions.
The International Sleep Products Association continues to push for the House version of the CPSC Reform Act, which it believes is less burdensome to the mattress industry than the Senate version. It is unclear at this time when the Conference Committee will begin formal work on the bill.
Global Depot to supply mattress makers
A group of bedding industry veterans has formed Global Depot Pty. Ltd., based in Clontarf, Australia, to provide supply services for manufacturers interested in producing mattresses in their plants in China, India and Eastern Europe.
The company has offices in Guangdong, China, and Taipei, Taiwan, and draws materials from throughout Asia. The company expects to tap into supply sources in Europe as it expands.
Global Depot says it can supply finished mattresses compliant with British and U.S. flammability laws, various types of innersprings, insulator pads, ticking, latex and visco–elastic pillows, and adjustable electric beds.
The company’s principals are Darren Nelson, who has five years of experience in the bedding industry and previously was with Therapedic Sleep Products in Australia; Ning Wang, who has 14 years of experience and also was with Therapedic in Australia; Adam Ransley, who has five years of experience in bedding and in designing production planning software; and Gilbert Guh, who has 14 years of experience as general manager of a mattress factory and components supplier in China.
The company was founded in September when its principals realized that bedding manufacturers often have trouble sourcing supplies and materials from Asia. Difficulties include communications problems with suppliers and questions regarding the reliability of materials over time. Global Depot is targeting medium to large bedding manufacturers that produce beds in mid– to upper price points. Its Web site is www.globaldepot.com.au.
Southerland expands facilities in Southwest
Bedding manufacturer Southerland Inc. has expanded its operations to better serve mattress retailers in the southwestern United States, opening a new plant in Oklahoma City and expanding its existing plant in Phoenix.
The Oklahoma City plant, which opened in January, is 80,000 square feet and has 50 employees. Herman Southerland, chief executive officer of the Nashville, Tenn.–based company, said he expects the facility to eventually employ 70.
The Phoenix plant is being doubled to 100,000 square feet and also has 50 employees. Completion is scheduled for this month.
Each project gives Southerland more capacity than it has at its Nashville headquarters plant. The expansions also help the company cope with escalating fuel prices that have made transporting mattresses to the Southwest increasingly expensive, Southerland said.
The two plants manufacture all of Southerland’s lines.
Vegas market shifts dates
The World Market Center in Las Vegas is shifting the dates of its winter furniture market from late January to mid–February beginning in 2009. The market will be Feb. 9–13.
Market officials say the dates best align with exhibitor business cycles, relieve industry show conflicts and fall during a period in which Las Vegas hotel rates are lower.
“We are committed to meeting the evolving needs of our customer base, and adjusting our market schedule is one way of doing that,” said Robert Maricich, World Market Center president and chief executive officer.
This summer the World Market Center will open Building C, allowing it to consolidate exhibitors on its 57–acre campus and reducing its reliance on off–site exhibition space. The 2.1 million–square–foot hall has 16 floors.
The summer furniture market is July 28–Aug. 1.
L&P’s first–quarter sales fall 5%
Components supplier Leggett & Platt reported that first–quarter sales from continuing operations were $1 billion, 5% lower than the same quarter last year. Same–location sales declined 6% due to soft demand and the company’s exit from segments with unacceptable profit margins. That decease was partially offset by 1% growth from acquisitions completed in 2007.
“Our balance sheet remains in excellent condition, and we expect our annual cash from operations to routinely exceed the amount needed to fund capital expenditures and dividends,” said David Haffner, president and chief executive officer of the Carthage, Mo.–based company. “Given our strong, consistent cash flow, even during soft economic cycles, we are confident we can meet these priorities.”
Haffner said he expects several markets to remain soft and present challenges in 2008. L&P has initiated price increases to recover the higher costs of steel.
Total sales for L&P’s residential furnishings division, which includes bedding, decreased $66 million, or 11%, for the first quarter. The same–location sales decline primarily reflects the ongoing soft demand for residential–related markets, according to the company. Earnings before interest and income taxes from continuing operations decreased $19 million, primarily due to lower sales, higher steel costs and the timing in recovery of those costs.
For 2008, sales from continuing operations are projected to be approximately $4.2 billion, or about 2% lower than in 2007.
Magniflex expanding showrooms globally
Bedding manufacturer Magniflex, with headquarters in Prato, Italy, has opened five new showrooms around the world.
They are located in the Chinese cities Guangzhou, Beijing and Shanghai; the Ukrainian capital Kiev; and Dubai in the United Arab Emirates. Magniflex already had showrooms in Tokyo; New York City; Florence, Italy; and Dubai.
“While our retailers will continue to sell direct, having our own showrooms in high–traffic areas internationally will expose the brand to more consumers,” said Marco Magni, Magniflex global sales director.
Magniflex, which entered the U.S. market last year with a showroom in Manhattan’s SoHo district, held a grand re–opening of the space this spring.
After a remodel, it features an additional lower level as retail space and displays an expanded selection of mattresses and accessories.
The company also announced it has formed new relationships with several retailers in the United States, including dealers in New York; Washington, D.C.; Virginia; Michigan; California; and Florida.
“Magniflex is committed to serving the U.S. market,” said Irwin Pearl, Magniflex national sales director. “In addition, we are introducing a new, lower priced segment to broaden the appeal of our products so that younger consumers can begin to enjoy the benefits of the brand.”
Tempur–Pedic’s sales drop 7%
Net sales for Lexington, Ky.–based mattress maker Tempur–Pedic International declined 7% to $247.2 million during the first quarter of 2008, the company announced.
Net sales in the domestic segment declined 16%, but were offset by a 10% increase in net sales internationally. However, on a constant currency basis, net sales in the international segment fell 3%. The company generated $24.6 million in cash from operating activities, compared with $28.6 for the first quarter of 2007. During the quarter, Tempur–Pedic reduced total debt by $18.2 million to $550.5 million, as compared with year–end net debt of $568.7 million.
The company reported net income of $13.5 million for the first quarter of 2008, as compared with $29.8 million in the first quarter of 2007.
“The U.S. macroeconomic environment deteriorated during the quarter and contributed to what we believe is a slowdown in the mattress industry,” said H. Thomas Bryant, Tempur–Pedic president and chief executive officer. “Based on industry data and retailer feedback, we believe average selling prices in the industry are trending lower as many consumers defer high–end mattress purchases.”
Bryant added that while he was disappointed with the company’s first–quarter results, the company generated significant cash flow and reduced its debt.
“We have taken decisive actions to align operating expenses with revised sales expectations, and we are executing a comprehensive plan to improve cash flow and substantially reduce inventories,” he said. “Over the next few quarters, we will begin the most extensive new product launch in our company’s history. This launch will include new mattress models, advanced technological innovations and new pillow concepts, as well as an upgrade to the most widely distributed mattress model in our lineup.”
The company has revised its forecast for 2008. It expects net sales to range from $1.01 billion to $1.07 billion, a decrease of 9% to 3% compared with 2007.
Hollandia adds measure of safety to bed
Hollandia International, a mattress producer based in Sderot, Israel, has introduced the Executive SAFE–T Bed as part of its luxury line of sleep systems. A heavy–duty safe is built into the bed, allowing owners to keep valuables near them as they sleep. The bed carries a suggested retail price of $20,400.
The safe locks with a key and is located in the head joint of the bed base, just beneath the mattress. It is kept in place with Velcro and camouflaged by an additional piece of fabric. It can be added to any Hollandia Platinum–Luxe Advanced Sleep System for an additional $399.
The safe doesn’t interfere with comfort, according to Maya Ben, Hollandia vice president of operations.
“We made sure to position the safe within the bed base, under the mattress, so as to not change the feel of the bed when sleeping,” she said. “Whether you want to store your jewels, cash or other valuables, the safe is a unique feature that should give our customers a different sense of security.”
Specialty association takes permanent space
The Specialty Sleep Association will open a permanent showroom at the World Market Center during the summer furniture market. The 15,000–square–foot space is in the new Building C, which is scheduled to open in July.
The space will showcase specialty sleep products and technologies, including air, adjustable, flotation, visco–elastic and latex foam, gel, natural and organic materials, top–of–bed products and futons.
During past Las Vegas markets, the association contracted for temporary space for its members in pavilion tents located away from the main buildings.
“Our new space will not only be a showcase for our members, but will allow us to have a more active presence that we can use to promote the category,” said Dale Read, president of the association. “It will be much more of a destination for retail buyers than in the past.”
Simmons’ first–quarter sales up 3.5%
Net sales for Atlanta–based bedding manufacturer Simmons increased 3.5% to $276.9 million for the first quarter of 2008, an increase from $267.4 million from the same period last year.
However, rising raw material and fuel prices negatively impacted Simmons’ operating results for the quarter, according to Charlie Eitel, Simmons chairman and chief executive officer.
Domestic net sales increased $6.8 million, or 2.9%, to $245.1 million, compared with the same period in 2007. Simmons attributed the domestic growth to a 7.9% increase in conventional bedding average unit selling price, partially offset by a decrease of 3.6% in conventional bedding units sold.
Gross profit for the first quarter of 2008 was $109.7 million, or 39.6% of net sales, compared with $108.2 million, or 40.5% of net sales, for the same period of 2007.
Operating income for the quarter was $22.1 million, compared with $25.2 million for the same period last year. Net income was $2.5 million for the first quarter, compared with $4.4 million for the same period of 2007.
“Despite a very difficult retail and economic environment, we continued to gain market share in the U.S. during the first quarter,” Eitel said. “Our sales growth rate has exceeded that of the industry for nine consecutive quarters.”
Eitel said that to address the rising costs of raw materials and fuel, Simmons has taken steps to lower its overall cost structure and increased prices on some products.
Napping OK at 1800Mattress.com
New York–based bedding retailer 1800Mattress.com has begun offering customers 30–minute ‘test naps’ at any of its 46 locations.
“Whether it is luxury cars, designer handbags, jewelry or other luxury purchases, there is a trial period to ensure synergy between customer and product,” said John O’Connell, 1800Mattress.com senior vice president of retail and merchandising. “Sleep is the ultimate luxury, which impacts health, mood and productivity. It seemed essential to offer test naps on the products that our customers will spend approximately one–third of their life on.”
O’Connell said about half of the retailer’s customers want to lie on a mattress before they make a purchasing decision, and this allows them a better opportunity to do that.
Customers are encouraged to bring their favorite pillow or blanket to the showroom to allow them to be more comfortable and to accurately re–create their home environment. Store consultants will provide them with a sleep mask and offer tips for selecting the best mattress for them.
Green Idea: Trade Commission updating ‘Green Guides’
The U.S. Federal Trade Commission recently held a workshop on updating its “Green Guides,” which set rules for companies making environmental marketing claims. The workshop included presentations from industry, academia and environmental advocacy groups. Among the topics of interest to the mattress industry was an examination of the growing practice of green certifications and logos. Manufacturers making environmental claims can familiarize themselves with the existing guides by checking, www.ftc.gov/bcp/grnrule/guides980427.htm.
United Feather unveils hospitality offerings
United Feather & Down in Des Plaines, Ill., has introduced several products for the hospitality industry, including Prestige Natural organic top–of–bed items and the Eileen West Hospitality Collection.
The Prestige Natural line encompasses pillows, comforters, blankets and mattress pads in 300–thread count, certified organic cotton sateen fabric. They are available with three different fill materials and are machine–washable.
The Eileen West Hospitality Collection, named by the designer who created it, was inspired by the sea, coastlines and shifting coastal light, according to the company. The collection includes tailored duvet covers, sheets, shams and bed scarves in four colorways: white–on–white, blue, gold and silver.
Magniflex rolling out TV ads
Bedding manufacturer Magniflex, based in Prato, Italy, is launching a series of TV commercials this month aimed at North American audiences.
The first, with a humorous tone, features “Marco,” a suave Italian. Following a romantic evening with one woman, Marco changes the feel of his Dual Comfort Magnifico mattress to accommodate the next evening’s paramour, who apparently prefers a different level of comfort and support. Other commercials featuring Marco are planned.
The second commercial, set to air later this year, focuses on Magniflex’s SoyGreen mattress, part of the company’s GeoEthics collection, and emphasizes the importance of using renewable resources.
The commercials will run in the viewing areas of Magniflex retailers and will tell viewers how to find a dealer.
Thai Bedding wins GSG drawing
Thai Bedding of Thailand was the big winner in a Global Systems Group prize drawing during the 2008 ISPA EXPO in March. The company won a Porter International PFM–4000 flange machine, which has a list price of more than $15,000.
More than 100 show attendees entered the drawing from the machinery supplier. Other prizes were credits on genuine GSG parts from the company’s Gribetz International and Porter International brands. Taylor Bedding of Taylor, Texas, won the parts credit from Gribetz International and Firma AKANT of Ukraine won the parts credit from Porter International.
Tony Garrett, GSG president, drew the winning entries on the final day of the show in Baltimore, Md.
“Global Systems Group would like to thank all of our valued customers who were able to see the new machinery on display and participate in the prize drawing,” Garrett said.
GSG is a division of Carthage, Mo.–based Leggett & Platt. Information about its machinery and ISPA EXPO highlights can be seen at www.gsgcompanies.com.
Maryland repeals mattress law
Due to budget cuts, the state of Maryland has repealed its mattress label law. Among other things, the law protected consumers from unscrupulous companies that sell renovated mattresses as new products and required that all renovated mattresses be sanitized. The International Sleep Products Association is putting together legislation to reinstate the program and hopes to get lawmakers to reconsider the decision next session.
L&P No. 456 on Fortune 500
Carthage, Mo.–based components supplier Leggett & Platt is No. 456 on Fortune magazine’s annual list of the 500 largest U.S. corporations. The company fell from the No. 419 spot it held on the 2006 list. The list was published in the May 5 issue of Fortune. The company also appeared on the magazine’s list of the “Most Admired” companies, which was published in the March 17 issue.
VyMaC division honored
Retail Marketing Services, a division of mattress kit supplier and manufacturer VyMaC Corp. in Fort Atkinson, Wis., has won a Certificate of Excellence from the 2008 American In–house Design Awards for its marketing and point–of–purchase campaign promoting the company’s Everloft airbeds. The Everloft promotion included a price card, a window poster and two showroom posters. The awards are a showcase for the work done by corporate, nonprofit and institutional in–house design departments. About 500 of the 5,000 entries were honored with a Certificate of Excellence.
Verlo ‘gives big’ to charity
Verlo Mattress Factory Stores, a factory–direct licensing group headquartered in Fort Atkinson, Wis., donated 64 beds and 128 Everloft pillows to Interfaith House, a homeless shelter in Chicago. The donation, valued at $30,000, was part of a private effort by a group of viewers of the TV program “Oprah’s Big Give.” Leisa Onslow, a previous Verlo customer and a friend of the group, contacted Verlo’s headquarters with the request. “This has been an incredible cause–marketing effort,” said Keith Mackey, Verlo vice president. “We’re always happy to help in any way we can.”
Bemco rolls out ad kit
Bemco Associates, a licensing group based in Des Plaines, Ill., has released its 2008 gymnastics–themed newspaper advertising and marketing kit to dealers. Bemco has been a sponsor of the U.S. Gymnastics Team since 1990 and the new campaign features men’s champion Alexander Artemev and women’s champion Chellsie Memmel. One marketing element is a label for the Bemco Champion sleep set that features a color photo, the designation “Official Mattress of the U.S. Gymnastics Team,” the USA Gymnastics logo and the title “Mattress of Champions.”
Retailer Sleep America aids food bank in Phoenix
Phoenix–based bedding retailer Sleep America and radio station KSLX–FM collected more than 18,200 pounds of nonperishable food and $11,000 in monetary donations in April for the second annual “Get in Bed with Mark and Sleep America” promotion. The food and money were donated to St. Mary’s Food Bank in Phoenix. Twenty–eight Sleep America locations served as drop–off points. To attract the attention of listeners, KSLX–FM morning show host Mark Mayfield stayed in a queen–size Kingsdown bed in front of a Sleep America store for three days—until one of the retailer’s trucks was filled with food.