The U.S. mattress industry is expected to bounce back this year, with unit shipments projected to rise 4.5% and the dollar value of those shipments predicted to increase 7.5%, according to a new industry forecast from the International Sleep Products Association.
The recovery is likely to be even more robust in 2011. The ISPA forecast, released in early March, predicts unit shipments will grow 6.3% and dollar values will increase 10% next year.
The gains would follow two years of losses for the industry, which, prior to that, had been enjoying more than two decades of gains, particularly in dollar values. ISPA’s annual report, which will show final tallies for 2009, will be released later this spring. But in early March, ISPA was estimating 2009 unit shipments and dollars to be down 8% and 10%, respectively.
By way of comparison, consider how the mattress industry recovered after past recessions.
In 2003, following the 2001–2002 recession was over, unit shipments rose 2.4% and dollar values increased 7.8%. In 1992, following the 1990–1991 economic downturn, units were up 5.1% and the value of those shipments grew 7.6%.
Signs of a mattress recovery began to appear in mid–2009. The sharp month–over–month declines began to moderate and by October, ISPA’s Bedding Barometer showed positive growth in both units and dollar values.
In a March 3 roundtable discussion during ISPA EXPO 2010 in Charlotte, N.C., Jerry Epperson offered the audience several other indications that things are turning around in the furniture industry and particularly in mattresses. Epperson is a managing partner at Mann, Armistead & Epperson Ltd., an investment banking and advisory firm based in Richmond, Va.
Among recent good news, Epperson said:
- More furniture and mattress retailers have announced plans for “significant new store expansion,” including Rooms To Go, Sleepy’s, Bob’s Discount Furniture, El Dorado Furniture, Haynes Furniture, Raymour & Flanigan, Art Van Furniture, R.C. Willey and Ashley HomeStores.
- Retailers, including Home Depot, Target, Sears, Pier 1 and Havertys Furniture, are showing modest sales gains and reported significant increases in their profitability in their last quarters.
- Publicly owned companies in the mattress industry are reporting higher profits.
- The winter Las Vegas Market in February was good for mattress manufacturers, who reported stronger retailer interest in new products.
Epperson spoke at the beginning of EXPO. If his talk had been later, he might have included EXPO itself as a positive sign. Attendance was strong at this year’s show and exhibitors reported seeing both good traffic and quality buyers.
Looking at the U.S. economy more broadly, Epperson pointed to other positive signs of a turnaround. Quarterly real GDP grew in the last two quarters of 2009. Also, U.S. monthly private construction spending stopped a rapid decline that began in early 2006 and posted some monthly gains in2009. In addition, the merger and acquisitions markets are beginning to recover and in some industries, including mattresses, companies are reducing debt and improving their gross margins.
Learn more
Members of the International Sleep Products Association can receive the association’s monthly and quarterly Bedding Barometer, semiannual forecasts and an annual industry report. Investment banking and advisory firm Mann, Armistead & Epperson Ltd. publishes a monthly furniture industry newsletter. To receive it, email Margaret LaPierre.
