Mid-year assessment reveals a tough climate
David Perry, Executive editor -- Furniture Today, August 2, 2004
A not-so-funny thing happened to bedding business this year: It took a tough turn.
A year that some had predicted could be a breakout (translation: huge) year for bedding has turned into a difficult year. Retailers are struggling to chalk up gains. Producers are shaking their heads and wondering what went wrong.
As the year moves into its second half — with the traditionally biggest month of the year, August, yet to be heard from — it's a good time to take stock and see where we are. To get some perspective, I looked back at the comments that the 12 largest bedding producers made this past December in our bedding outlook presentation to see what their crystal balls held for 2004.
Not surprisingly, I found lots of very optimistic comments. And many of those could yet turn out to be accurate.
But, interestingly, I also found a couple of comments that look surprisingly and perhaps eerily on target from the comfortable vantage point of hindsight.
Therapedic President Gerry Borreggine injected an unusual note of caution last December: "I think many retailers will be playing it close to the vest," he said then. "The indicators haven't been good to retailers over the past two years. It's hard to expect that it will change in 2004."
And Kingsdown President Pat Flippin also was cautious in his assessment of 2004. Said Flippin last December: "I don't see any dramatic increase in next year's retail volume. I see a fight for market share."
That predicted fight is under way.
It's too early to say how this year will shake out, of course, but some trends are clear. The year started off strong but has since slowed down considerably, based on the reports I'm hearing. Borreggine put it this way the other day: "The first six months were erratic. It's been that way in bedding for the last two to three years. There are some strong spikes in business, but then there are lulls for an extended period of time."
Officially, the year remains well in positive territory, according to the latest monthly sales report from the International Sleep Products Assn. It estimates that unit shipments for the industry are up 8.5% through May, with dollars estimated to be up 15.1%.
But some wonder if the unusually strong performance of a couple of key players — say Select Comfort and Tempur-Pedic — is skewing those figures to the high side.
It feels like a tough year for bedding to the folks I've been talking to lately. Do the exceptions prove the rule, or are they exceptional in their own right? As I've said in this space several times, the success achieved by Select Comfort and Tempur-Pedic is quite remarkable. Those are two great case studies.
Meanwhile, the rest of the industry lurches forward ... and then takes a step or two back.
Is sustained momentum a thing of the past?
