John Merwin

Execs weigh in on top challenges for the bedding industry

The bedding industry is facing a lot of issues – ongoing consolidation, low-cost imports, sustainability, apathetic consumers, just to name a few. What issue causes you the most concern and why?

John Merwin

John Merwin, CEO, 3Z Brands

Low-cost imports have been an issue for the better part of a decade, so I wouldn’t consider that a new issue. Our biggest issues lately have been managing inflation and high interest rates. Until we start seeing some relief from those two factors, the bedding industry could continue to see weak consumer demand.

Stuart Carlitz
Stuart Carlitz

Stuart Carlitz, founder and senior advisor, Bedding Industries of America

Imports have been an ongoing issue within the bedding and furniture industry because certain foreign governments have financially supported the dumping of product here. Then, when the U.S. penalized these companies, they skirted the penalties by opening plants in the U.S. This is an attempt to circumvent the anti-dumping rulings and bring U.S. dollars to their economy. Our government needs to continue its stringent stance imposing penalties and tariffs, both to the manufacturers and importers. These companies engage in questionable practices that raise serious doubts about the fairness of competition. It’s an abuse of the system and holds the market down to lower price points.

Concerning ongoing consolidations, it’s a natural course of business where the big get bigger and the weak disappear. Our industry has been a target of private equity firms where they buy one company after another, put them together and bring about consolidation.

Pennington, Shaun 12-2020
Shaun Pennington

Shaun Pennington, CEO, Diamond Mattress

My biggest concerns right now are high interest rates and low home sales, both factors that drive demand in the market. There are a lot of issues and challenges for our industry, but not all pose great concern for Diamond Mattress’ business.

Industry consolidation is making headlines but it’s good for companies like ours that help customers differentiate from the major brands that are consolidating. With new tariffs, we may see the flow of low-cost imports slow, which also makes Mexico a less competitive option.

While we’re seeing more onshore competition, it is from companies going after large batch volume business. Diamond Mattress has a different model with our ability to be extremely flexible and provide unique products at lower volumes, which allows retailers to maintain lower amounts of inventory, have faster turns, and earn higher gross margins and ROI.

Sustainability is increasingly important. Diamond Mattress is now Greenguard Gold certified for almost all of our mattresses and also can be applied to our private label products. We are expanding our sustainability initiatives, including certifications from GOTS and SP2.

Chris Taheny

Chris Taheny, senior vice president of sales, DreamFit

Today’s news cycle is having an outsized impact on our industry, and retail in particular. Unpredictable events either disrupt supply chains or affect consumer’s willingness to spend. The tragic collapse of the Francis Scott Key Bridge is one example. While our deep thoughts and prayers are extended to the affected families, the ripple effect of the incident is the disruption of supply chains along the eastern seaboard and the impact on commercial operations. We have to ask ourselves: What other unexpected events, whether natural disasters, military conflicts, terrorist attacks, or catastrophic accidents are on the horizon, and how might they disrupt logistical flow and consumer confidence? Our strategy remains having ample supplies of inventories and being nimble so we as an organization can respond to those events as quickly as possible and support our dealers.

jon stowe cropped
Jon Stowe

Jon Stowe, managing director, E.S. Kluft & Co.

It’s definitely a challenging time with a lot of changes within our industry. We’ve seen mergers and acquisitions and a few major retailers and manufacturers have gone out of business. On top of that, we’re facing issues worldwide that are creating uncertainty among consumers. There is Russia’s ongoing war in Ukraine, the conflict in Israel, and uncertainty around the upcoming presidential elections.

The primary concern for us is around the persistently low consumer confidence, compounded by ongoing high inflation and diminished buying power. As a result, foot traffic in furniture and bedding stores has experienced a sustained decline over the past several months.

To address this challenge, we have supported our retailers by implementing additional strategies to draw consumers back into our stores, such as targeted advertising campaigns and promotional offers. And, as always, we continue to focus on the quality of our bedding and its value to health-conscious consumers.

Chealen Martin
Chealen Martin

Chealen Martin, president and CEO, Englander

I believe that the biggest issue is when the industry loses its customer-centric approach due to all the issues that we’re facing such as consolidation, low-cost imports, inflation, and price pressures. Challenges arise and persist every year that cause companies to depart from their core competencies, and two significant ones we face currently are the ongoing consolidation, which often leads to a homogenization of products, and the influx of low-cost imports which frequently compromises quality. Each impacts the market dynamics and consumer trust in different ways.

Skip Naboicheck
Skip Naboicheck

Skip Naboicheck, president, Gold Bond

I think there are several issues facing the bedding industry right now, and it’s not so much that consumers are apathetic, but they’re being very careful about how they’re spending. We’re living in scary times right now and the consistent barrage of negative messaging on the news isn’t helping. Consumers are experiencing a lot of economic uncertainty, with housing prices and rents on the rise, grocery prices increasing, lack of job security – the list goes on. They have an endless number of concerns on their plate right now, which means they’re trying to stretch their dollars wherever they can. So even if they need a new mattress, it’s not high on their priority list, and that is alarming for manufacturers.

David Binke
David Binke

David Binke, CEO, King Koil

By far the greatest issue affecting our industry is consumer malaise. The macro-economic situation is tough because of high interest rates and stubborn inflation. In the ultra-premium, luxury category, the impact on our business is not as great as it would be if we were in the value segment, but there are simply fewer people out shopping, period, so we’re feeling some effect like everybody else.

In regard to sustainability, we have been at the forefront of the industry in recognizing its importance. Sustainability is not a trend, it’s a way of life for us at King Koil. We’re always looking to be more sustainable, from our product and how we produce to how we manage our business. It’s at the forefront of our thinking and it’s an issue our ownership is concerned about because it has global effects on the planet and how we live. So, we’ll always do our best to improve, to be better for the earth. That’s what we believe as a company.

Frank Hood
Frank Hood

Frank Hood, CEO, Kingsdown

We remain cautiously optimistic about industry growth and the overall improvement of the economy, as many are, and we are seeing a steadying of the market and some improvement. We are also encouraged that inflation is on a slow, but steady cool down, with core inflation rates beginning to ease, signaling potential relief ahead. Further, and in no small part, we are looking forward to the Federal Reserve staying on track with rate cuts in June.

Overall, it appears that consumers are showing resilience by maintaining spending, driven by a mix of optimism and the anticipation of more favorable economic conditions to come. For this reason, we continue to focus on the core strategies that bring Kingsdown products with Style and Substance to more customers.

Image of Billy Curtright
Billy Curtright

Billy Curtright, vice president of sales and marketing, Magniflex USA

I think one of the biggest concerns is the apathetic consumer to the sleep category. My crazy example is the idea that in many consumers’ minds a 10-year-old car is really old, and it’s time to purchase a new one.  But a 10-year-old mattress is just fine and they can get another 10 years out it. Not really considering how important those (hopefully) 8 hours of sleep are to each of us. And any mattress that is consistently used a third of every day will need replacing at some point. The mattress is such an important factor in our overall health and wellness routine.  As an industry, we just need to keep pushing the importance of quality sleep and not let consumers take their mattress life and mattress quality for granted.

Kyle Robertson
Kyle Robertson

Kyle Robertson, chief operating officer, Mlily USA

Our biggest concern for the industry at this time is likely the apathetic consumer sentiment that’s resulting in lower retail traffic overall. To attract consumers and drive traffic, many retailers respond with aggressive promotions. As an industry, we still need to stay focused on the message of sleep health and overall wellness. Promotional pricing can work if it’s a short-term tactic rather than a long-term strategy. It’s important for retailers to be converting on the limited traffic they see, and that is where it becomes even more important to provide the retailer and the RSA with strong product knowledge and selling skills combined with an authentic desire to match the customer with the best sleep products they can afford.

Richard Diamonstein, paramount sleep
Richard Diamonstein

Richard Diamonstein, managing director, Paramount Sleep Co.

We have 20 million mattresses going into the landfill on a yearly basis. The number has increased significantly due to the online industry creating the impression mattresses are a low-cost disposable product. Low-cost imports are driving consumer pricing down and we see it every day. Paramount is trying to build high-quality, hand-crafted products with the best materials, including natural, recycled and sustainable components. As an industry, the evolving development of sustainable materials and products needs to continue as a priority. Products built to last help alleviate the “disposable” mentality. With the evolution of new and cutting-edge materials, how will the industry tell the story – legitimately?  After having just attended the International Sleep Products Association EXPO, we saw new and exciting options, including raw materials and recycling methods, for reducing our environmental footprint as an industry.  It’s imperative that we respond responsibly.

Paris Fealy
Paris Fealy

Paris Fealy, CEO, Renaissance Elevated Sleep Technology (R.E.S.T)

The issue that we find most disconcerting is the turbulent economy. There is an entire supply chain from component factories all the way through the salesperson in the store that relies on a customer making the decision to purchase a bedding product (mattresses, adjustable basses etc.) Real buying power has been strongly affected over the past several years. This is partly due to rising interest rates and the effect it has had on the real estate industry (where sales are dramatically down). The mortgage industry reports one-third as many mortgages in 2023 versus 2022, and 2024 is off to a poor start.  If there is one industry that acts as a harbinger of things to come in furniture and bedding, it is the real estate market.  As one famous politician once opined, “It’s the Economy stupid!”

Bob McCarthy
Bob McCarthy

Bob McCarthy, managing director, retail, Resident Home

What makes the mattress industry great, and challenging are the ever-changing dynamics that we have to face. The biggest challenge now is creating more demand and improving tickets.  Covid caused many consumers to address the bedroom in 2020 and 2021.  With the economy slowing, mattress purchases now are easily deferred which is slowing our industry growth.  We have to continue to talk to the consumer and make the purchase more emotional. This will accelerate the purchase cycle and grow tickets.

Laurie Tokarz
Laurie Tokarz

Laurie Tokarz, president, Restonic

My biggest concern is the consumer – the pull ahead from Covid is still unwinding, the impact of compounded inflation, reactivating school loan repayments, higher mortgage rates all are negatively impacting mattress sales. Then when you add the changing consumer spending habits – spending on experiences rather than material goods – it really creates a challenging environment.

Bill Hammer

Bill Hammer, president, Shifman Mattress

The luxury mattress category has become crowded with many brands purporting luxury with the combination of an elevated story and a high price. However, true luxury is found in its manufacturing and comes from a commitment to deliver premium quality, sustainable, beautifully designed products that will satisfy the most discriminating consumers. At Shifman, our deeply engrained philosophy of quality, craftsmanship, and customer satisfaction is a tradition of excellence for over 130 years. My concern is with brand claims that are made without much responsibility or an authority to police the validity of such claims. The lack of an authority to determine the authenticity of claims makes it more difficult for luxury manufacturers like Shifman to portray the genuineness of our material content and manufacturing processes. It is also a disservice to consumers who are increasingly interested in understanding what they are buying and the real benefits, especially as they relate to their health and wellness.

Nick Bates
Nick Bates

Nick Bates, president, Spring Air International

Market conditions have posed significant challenges for the bedding industry, leading to a decline in sales. Several factors are contributing to this, including the effects of an election year and the slower months between holiday shopping seasons. Securing floor placements requires more diligence than ever, but we are persevering and continuing to make strategic moves and investments in order to stay ahead of the curve. We know conditions will eventually improve and we are preparing for a more positive business environment when economic conditions ease.

Borreggine_Gerry 8-2019
Gerry Borreggine

Gerry Borreggine, CEO, Therapedic International

Most of the aforementioned issues are reoccurring concerns we face from year-to-year.  What causes me to pause this year is the U.S. economy. The stock market is at an all-time high, which very well may be inflated; we have all-time high real estate prices, which many consumers have used to borrow against their homes; and consumer debt is higher than it was prior to the 2008 correction.  All indicators suggest a correction is forthcoming. The only saving grace for the home furnishings industry is that we are, by and large, impervious to downturns in the economy. Ours is a need-driven product that in many cases cannot be delayed.

See also: 3 key bedding trends continue into High Point Market | Sheila Long O’Mara

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