Top 10 bedding producer Spring Air, based in Tampa, Fla., closed all nine of its corporate–owned manufacturing plants in early May. Three independent Spring Air manufacturers—who opted out of the 2007 corporate buyout, or “rollup” of licensees—are continuing normal operations. Licensees in Canada also remain open.
Spring Air’s majority owner, Bethesda, Md.–based investment firm American Capital Ltd., shuttered the corporate Spring Air facilities after efforts by Spring Air Acting President Steve Cumbow to orchestrate a last–minute management buyout failed.
Corporate executives have not returned phone calls.
Hundreds of Spring Air employees around the country reported showing up for work the week of May 4 to find facilities already shuttered or in the process of closing. Workers have said they have little information about final paychecks or other salary and benefit issues. One former employee has filed a lawsuit in Florida, claiming Spring Air has violated the federal Worker Adjustment and Retraining Notification Act by not giving a 60–day notice of the company’s closure.
Several news outlets have reported that Spring Air was filing for bankruptcy protection and liquidating its assets but, as BedTimes went to press, court papers had not yet been filed.
News of the corporate shutdown has had wide–ranging impacts throughout the bedding industry. Carthage, Mo.–based components supplier Leggett & Platt reduced its first–quarter earnings per share by $0.2 to $0.4 and increased its bad debt expense to $8.5 million because of the “exposure” it had to Consolidated Bedding, the primary Spring Air producer.
And retailers throughout the country were forced to find product to replace Spring Air on their floors. Other mattress manufacturers, including Comfort Solutions, Natura World and Serta, quickly got advertising campaigns up and running to encourage Spring Air dealers to switch to their brands.
John Grove Jr., president of the largest licensee based in Greensboro, N.C., and one of the independents still producing, said he was servicing his customers as usual and also fielding order inquiries from around the country.
“We’re a healthy company with a strong cash position. We’ve been in this business since 1971and we’re here to stay,” he said. Grove said his company can continue to produce Spring Air mattresses, even if corporate Spring Air files for bankruptcy protection and liquidates.
Other U.S. licensees still operating are in Beaufort, S.C.; and Grand Rapids, Mich.
In addition, one corporate–owned facility in Chelsea, Mass., was quickly re–opened and employees re–hired after Ed Bates re–purchased the business that he had sold to Spring Air in 2007.
Industry sources report that several companies and industry veterans are considering purchasing individual plants or larger portions of Spring Air’s assets, but the future of the brand is still very much up in the air.
Grove predicts there will be more plant buy–backs and re–openings among former Spring Air licensees and said that, despite the current turmoil, he has faith in the future of the brand.
“Whether or not we make a bid for the brand in the future, we are going to keep it going,” he said.