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FrontMatter
Signs point to sustained mattress recovery
New ISPA forecast
predicts gains in
both 2010 & 2011
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
www.sleepproducts.org/bedtimes
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.
➤ 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.
For more information, check
www.sleepproducts.org. Investment
banking and advisory firm
Mann, Armistead & Epperson Ltd.
publishes a monthly furniture
industry newsletter. To receive it,
email Margaret LaPierre at
mlp@maeltd.com.
➤ 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. (To read more about
EXPO, see stories starting on
Page 48.)
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. BT
BedTimes | April 2010 | 7