Drawing on its roots as a family-owned company, HSM celebrates its diamond anniversary as a producer of bedding components
Grown from roots firmly established during the past 75 years, today Hickory, North Carolina-based HSM, a diversified manufacturer servicing the bedding and other industries, continues to branch out, seeking opportunities for growth.
HSM was founded as Hickory Springs Manufacturing Co. in 1944 by Parks C. Underdown near the Hickory community of Brookford. Originally a producer of wire and springs for the bedding and furniture industries, the company soon began adding product lines and specialized factories for those two industries and others — a practice of vertical integration and diversification that remain hallmarks of the company today.
Two Long Histories of Success: It is no small feat to stay in business for decades. This fall, BedTimes spotlights two companies celebrating major milestones in 2019. In this issue, we feature HSM, which is marking 75 years in business; in September, we profiled Atlanta Attachment Co., founded 50 years ago. For most of their histories, the companies operated separately, though, over time, HSM became a customer of AAC and, in 2016, HSM acquired AAC as a standalone division. You’ll read in the stories that the companies, which both began as family businesses, share similar origin stories and corporate values.
Over the next 75 years, Hickory Springs evolved, mostly organically, into a major supplier of many products for the home furnishings industry. Its products included springs, sleeper mechanisms, rocker swivels, bed rails, flexible polyurethane foam, upholstery supplies and more.
As a result of the strong business acumen and marketing spirit of Underdown and his successors — son Neil Underdown, son-in-law Bob Simmons and cousin Bob Bush — the family-owned company proudly celebrates its diamond anniversary this year. Quite a feat given that, according to the Small Business Administration, only 50% survive the first five years.
With the next 75 years in mind, “We have our eyes set toward the future,” President and Chief Executive Officer Mark S. Jones says. “We have recently solidified a new executive leadership team with a diverse background and are looking to deploy growth capital in the markets we serve.”
“The vision and entrepreneurial drive of Parks, our founder,” Jones says, “planted the seeds of the company’s long history of success.”
Members of the founding family are helping with this transition. Parks Underdown’s grandson, David Underdown, is a member of the third generation to work for the company and currently serves as chair of the board. Several fourth-generation family members work for HSM today, as well. Generation five already is in college, working summers at HSM in various plants and offices. Some aspire to pursue a career with HSM.
“The company’s adaptability to launch greenfield locations in seating solutions, wire and Marshall coil springs production, as well as pouring and fabricating foam, and acquiring businesses while serving a diverse customer base has proved to be successful over the years,” Jones says.
In conjunction with a marketing campaign in 2013, Hickory Springs rebranded as HSM “to focus on business units and market segments instead of customer bases and geographic footprints,” Jones says. In 2016, HSM restructured into operating divisions, which include Hickory Springs Manufacturing, HS Foam Fabricators, HS Metalworks, HSM Diversified Products & Services, HSM Transportation & Specialty Manufacturing, and HSM Logistics. It also owns Atlanta Attachment Co., which celebrates its 50th anniversary this year.
Including AAC, HSM has more than 2,700 employees, 30 production facilities in 15 states, a distribution center in Canada and a 100-truck fleet used to manage shipments of materials and deliveries to customers, as well as for third-party logistics.
Not including AAC, bedding components (including fabricated foam, innersprings and fibers) and finished bedding products (including adjustable bases and finished mattresses) make up about 25% of the company’s business, according to Jones. HSM also serves the apparel, home furnishings, health care, packaging, transportation and other markets.
“A pivotal time”
While HSM retains its roots as a family business, during the past decade or so, as a cohort of longtime company leaders retired or passed away, the company began to bring in more independent board members and executives with different perspectives.
“It was a pivotal time in the company’s history,” Jones says. “It had always been a family business that promoted from within.”
Those shifts in leadership coincided with a difficult period as the company battled, along with many other foam suppliers, a class-action lawsuit related to flexible polyurethane foam. No wrongdoing was proven, but in 2015 the company and other foam suppliers reached settlements to compensate plaintiffs and their attorneys.
With a management-consulting background gained from multinational and boutique firms, Jones has proven experience in restructurings, interim management and corporate transitions, along with helping family businesses implement strategic initiatives. He joined HSM’s board in 2015 as interim CEO. In October 2016, he was tapped as president and CEO.
“When I joined the board, we were exploring strategic questions of the company: How will foam litigation impact our business? What do we want to be in three to five years?” Jones recalls. “We began a reset, a transformational journey that we’ve been on ever since.”
As he took the helm, Jones shepherded in big changes. In 2016, HSM sold five of its foam-pouring plants to Arsenal Capital Partners. In 2017, HSM divested its remaining foam production assets.
As it was divesting its foam-pouring operations, HSM added two businesses: an acquisition for its Transportation Division and AAC, a manufacturer of automated machinery for the mattress, furniture and other industries based in Lawrenceville, Georgia.
AAC is a “great fit with HSM’s core values, culture and family business mindset; we are truly aligned,” Jones says.
He adds: “We were a longtime customer of AAC, and now we draw on its expertise. We’ve also seen new opportunities by introducing its capabilities and expertise into new markets such as transportation, floor coverings and furniture. AAC has a strong team that is on the cutting edge of what’s happening with automation. Finding good labor can be challenging; AAC helps us stay current with automation so we continue to drive efficiencies in our operations.”
The AAC purchase continues a company history of acquisitions, including the purchases of Spiller Spring Co. and Holland Wire Co. in the 1980s, along with foam and transportation businesses in the 1990s and 2000s. HSM remains open to growing the company through that means.
Jones also sees the AAC acquisition as an investment in its bedding business. “We plan to continue growing the sleep products market,” he says. “We’ve partnered with bedding OEMs and launched new coiling operations to expand that part of our business by opening facilities in Arizona and North Carolina that specialize in producing individually wrapped coils.”
While digesting major merger-and-acquisition initiatives in 2017 and 2018, Jones concentrated on assembling a new executive team. Michael Hinshaw, who previously was an operating executive for private equity investors and a consultant for McKinsey & Co., joined HSM in 2017 as chief operating officer. In 2018, Troy Bryce was named chief financial officer and treasurer, after serving as CFO for Pharma Tech Industries and as vice president of finance and treasurer for snack maker Synder’s-Lance Inc. Also joining HSM that year was Ed Abrao-Netto, vice president and general counsel, whose previous experience includes senior legal positions for Ingersoll Rand, Duke Energy and Piedmont Natural Gas. In addition, Darrell Bryant was promoted to vice president of human resources in 2017 when the company’s transformational journey commenced. He joined the company in 2014, previously having worked for WSP and The Hershey Co. in roles focused on talent acquisition, retention, and succession planning.
When Parks Underdown founded Hickory Springs, he focused on what he believed were the two most important parts of the business — the employees and customers. “He passed that focus down to the second generation of leaders,” Jones says. “We pride ourselves that the average tenure of our employees exceeds 20 years with the company and that we have celebrated two associates achieving 50 years of service.”
Jones maintains that focus but has his own spin on it. He emphasizes what he refers to as the three pillars driving the company today:
1. People (employees)
2. Processes (inspiring “a new culture striving to thrive through operational excellence”)
3. Products (with a focus on in-house innovation and collaborative research and development with its customers).
“We want to be a valued supplier but also a key strategic partner to our customers,” Jones says. “We differentiate ourselves by driving innovation, product development and product launches conceived in partnership with our customer.”
The next 75 years
As HSM enters the company’s next 75 years, Jones and his team continue to focus on many of the factors that have guided them to this point. Jones has made a firm commitment to the future. “We’ll continue to have a strong emphasis on maintaining the culture of a family-owned business. The company will remain true to our core principles and build on our strategic pillars — people, processes and products.”
In the near term, specific goals include “driving innovation in the markets we serve, partnering with growing companies” and “expanding our partnership with Harrison Spinks,” Jones says. (See story about the companies’ joint venture on page 50.)
“As HSM commenced its rebranding before I arrived, it launched a new tagline, ‘One Company, On the Move,’” he says. “That still applies. HSM is on the move.”
Celebrating a Diamond Anniversary
As part of its 75th anniversary festivities, HSM unveiled a special logo and released a video showcasing its companywide culture of customer service and manufacturing excellence.
The logo includes the number 75 in a bold font, sitting atop and wrapping around HSM’s corporate logo with the tagline, “Manufacturing since 1944.” The video, filmed across HSM facilities, features interviews with company executives and longtime employees discussing how the company has changed since its founding in 1944 and how it continues to evolve.
“This is a very exciting time in our company’s history. Seventy-five years is an incredible milestone,” says Mark S. Jones, president and chief executive officer of the Hickory, North Carolina-based company.
Throughout 2019, HSM has worked with local charities in the communities in which it has facilities to honor the company’s philanthropic legacy. And, as the anniversary year draws to a close, HSM will host celebrations with employees and corporate partners.
A Partnership Across the Pond
A licensing deal HSM signed in 2012 with Harrison Spinks later became a joint venture. The JV with the vertically integrated bedding producer based in Leeds, England, has become a fruitful partnership that HSM would like to see expand and grow, says Mark S. Jones, president and chief executive officer of the Hickory, North Carolina-headquartered company.
Under the agreement, Harrison Spinks licenses microcoil technology from its Spinks division to a joint venture with HSM, which has manufactured the coils in the United States and marketed them to mattress manufacturers throughout the Americas and Caribbean basin.
Brad Crump, product manager of HS2 in HSM’s Hickory Springs division, works with Spinks colleagues in England on marketing the microcoil product lines. “Business has grown,” he says, “beyond its original forecast. We continuously look for ways to further partner with Harrison Spinks.”
“It’s been a fantastic partnership,” Crump adds. “It’s a collaborative effort. Spinks makes the machinery and sets out the initial coil designs in the United Kingdom. Then we adapt them domestically to the U.S. market and HSM’s capabilities. We’re always trying to innovate, designing new products and reaching new customers.
“Microcoils, which are used in the top comfort layers of a mattress, have helped boost the popularity of hybrid mattresses. There’s so much room for growth in the category,” he says. “HSM has been integral in creating hybrid beds and bringing the hybrid feel to the marketplace. The bedding industry had switched to foam in such a big way. We saw that wire was missing from the equation. Using microcoils in the comfort layer had never been done before.”
HS2’s microcoils also are “tailormade for boxed beds,” Crump says. “They perform perfectly in roll-packed and boxed products. As the microcoil line continues to evolve toward softer gauge wire and higher coil counts, it’s also getting a rebranding. We are promoting coil count and use Micro 1.0, which features about 1,000 coils per queen-size sheet, and Micro 2.0 that has about 2,000 coils per queen sheet. Micro Duo is a new product — a coil inside a coil that has about 5,000 coils per queen sheet. It’s never been done before and its comfort is truly amazing.”
At Interzum Cologne in Cologne, Germany, in May, Spinks unveiled Cortec, a core pocket spring unit with 3,400 coils in queen size that can be used in mattresses with just a spacer fabric on top. HSM expects to bring Cortec to the U.S. market in 2020, Crump says.
“It’s the most innovative product I’ve seen in the marketplace,” Crump says. “It’s basically a taller microcoil, 4 to 8 inches tall, in a glueless system that ultrasonically welds the scrim to the top and the bottom, so fabric and wire are easily recyclable.
“After all these years working on the comfort layers, we’ve gone back to the core. So, we’re creating building blocks — core and comfort layer — to create more support and comfort without the use of chemical containing foams,” he says.
Family Culture and Reinvention Mindset Draw Employees to HSM
From the company’s start, HSM founder Parks C. Underdown emphasized that employees were vital to the company’s success, says Mark S. Jones, president and chief executive officer, which has headquarters in Hickory, North Carolina.
Today, employees remain foundational. “We pride ourselves on the average tenure of our associates. We have more than 2,700 team members, with an average tenure exceeding 20 years with the company and have celebrated two associates (Deanie Hilton, human resources, and Gene Stewart, MetalWorks Division) achieving 50 years of service,” Jones says.
We asked key member Tim Witherell what drew him to HSM and why he enjoys working at the company. (Answers have been lightly edited for style, clarity and length.)
What is your official title?
Vice president/general manager of Hickory Springs Bedding Business Unit
When were you hired? Rehired?
Originally, I was hired in 2013. I left for nine months and returned in September.
What first drew you to the company?
It has a reputation as a market leader.
Why did you recently return?
The executive team’s vision to reinvent the company was something I was drawn to. The bedding market has seen some incredible disruption in the past seven to 10 years. I was excited by the challenge of creating the next industry disruption.
How has HSM changed during your time there?
There have been a lot of associates come and go. But overall, the company still has a familylike atmosphere.
What do you think of the changes the new leadership team has implemented over the past few years?
I believe the executive team is making the necessary changes to transform HSM into a 21st-century company. Most companies our age don’t last. So, they’re implementing changes that will carry us forward.
What do you think sets HSM apart from its competitors?
Our associates are incredible to work with. They work hard to do what’s best for our customers and company.
What have you enjoyed most about your years at HSM?
I like working with great people and getting to know our customers.