International Bedding gains ground

Tony Smith completes first year as CEO

David Perry -- Furniture Today, August 18, 2008

FORT LAUDERDALE, Fla. - Top 10 producer International Bedding, boosted by fresh product lines and new financial support, says it's gaining ground in a highly challenging business climate.

That's the assessment of bedding veteran Tony Smith, who just wrapped up his first year as CEO of the bedding producer, based here.

He acknowledged that his company, like others in the industry, has encountered challenges in the past year but said International Bedding is growing its business with existing customers, bidding for new dealers, and is positioned for more growth.

One sign of the company's comeback, Smith said, was the good reception it received at the recent Las Vegas Market, where it introduced a sharply priced Classic Collection line, retailing from $299 to $999, and showed two other lines.

"The dealer feedback was very positive," he said.

"They said we had good margins and good quality. They also like our item-complete delivery and the quality of our service. We are truly the new International Bedding."

IB also did well with its Origins and Europa lines, Smith said. The Origins line features memory foam and latex, and includes copper and silver molecules in the fabrics for homeopathic benefits, while Europa is a luxury line with a coil-on-coil construction. Eric Johnson, senior vice president of merchandising and marketing, was the primary architect of the lines.

IB suffered last year when the company faced "a leadership void" before the new management team was installed, Smith said. The company was in a transition period after the founding Ellman family sold the business to pursue other opportunities.

Smith said IB lost some volume in that transition period. "What's really gratifying," he said, "is that despite those losses, we've grown quite a bit with our existing partners. We wouldn't be growing if we didn't have a good product portfolio and good plants."

IB operates seven wholly owned bedding plants across the country. Net sales last year were in excess of $150 million, according to Smith, and are on the upswing.

Another sign of the company's firm footing, he said, is a new financial support package. IB's senior lender group recently agreed to extend the term of its loan agreement through December 2011. The extension also provides for additional borrowings under certain conditions and creates significant liquidity to meet near-term cash requirements, Smith said.

"This is a very meaningful show of support from our senior lenders," he said. "We appreciate the confidence that our senior lenders, board of directors and ownership have shown in the management team and in all the employees at International Bedding during what has been a very difficult period for the entire bedding industry. As International Bedding enters the second half of the year, we are financially stable, our plant operations continue to improve, our sales are growing, and we are very optimistic about the future."

Another cause for optimism, Smith said, was the addition earlier this year of Dan Hige, a veteran of more than 15 years in the bedding industry. He is senior vice president of manufacturing, a new position at IB, and is responsible for plant operations. Smith described Hige as "one of the top five manufacturing leaders in the industry."

Smith said IB's employees have "seen the culture evolve" in the past 12 months. "We have a common focus and common goals," he said. "We do a lot of things well."

International Bedding is owned by a unit of Chicago-based Mesirow Financial, which acquired a majority stake in the company last fall. "Mesirow wants to build the business," Smith said. "They said to me, ‘Build your team. We are here to support you.'"