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BedTimes, Industry News, March 2008Spring Air secures additional capital...and more industry newsSpring Air secures additional capital In June 2007, H.I.G. Capital and American Capital were instrumental in the consolidation of Spring Air and its major licensees. Since then, Spring Air, under the leadership of Chief Executive Officer Bob Hellyer, has restructured its brands and models, tightened its list of suppliers and assembled a team of experienced bedding executives. “This new capital will enable us to propel Spring Air forward, completing our integration and creating the appropriate level of capital to complete our new product launch,” Hellyer said. “We are grateful to our vendors and suppliers—real partners in business—for their patience and look forward to their ongoing support of our continued growth. We are now poised to deliver on our strategic plan to make Spring Air the leading value ‘S’ brand on every retail floor.” Of the additional funding, Peter Cornetta, an H.I.G. Capital managing director, said, “H.I.G Capital and American Capital are delivering this new infusion of capital because we believe that the strategy of Bob Hellyer and his management team is exactly the right formula for growth. …The industry is responding very well to Spring Air’s initiatives, and we are very pleased with the strides the company and its management team have made.” H.I.G. Capital is Spring Air’s largest shareholder. Bowen Diehl, an American Capital managing director, added, “We are very pleased to support Spring Air’s growth initiatives. The senior leadership team of the company has done a wonderful job integrating multiple independent companies into one unified organization, securing new distribution and at the same time developing some exciting new products for the industry.” Texas proposes adopting 1633 as state rule Under a proposed rule issued by the Texas Department of State Health Services, all mattresses and mattress pads manufactured or renovated in or delivered into the state would be required to meet the 16 CFR 1632 federal cigarette standard and the 16 CFR Part 1633 federal open-flame standard. Among other things, the proposed rule would change the definition of “new” and “secondhand” bedding, add a definition of “floor model” and clarify when floor models are considered to be secondhand bedding. The text of the proposed rule can be found at www.dshs.state.tx.us (search for “bedding”). Interested parties have until May 5 to submit comments. The International Sleep Products Association’s Government Relations Committee is reviewing the proposal and is likely to support enforcement of 1632 and 1633 by the state. For more information, contact Ryan Trainer, ISPA executive vice president and general counsel, at rtrainer@sleepproducts.org or 703-683-8371, Ext. 1118. Hilding Anders returns to German market Hilding Anders previously had a presence in Germany through the subsidiary Billerbeck Group, which it acquired in 2001. The company sold the group in 2003 because Billerbeck’s production of pillows and quilts no longer fit into Hilding Anders’ core product line, mattresses. “The time is now right for Hilding Anders to make a new effort in Germany,” said Anders Palsson, president and chief executive officer of the company, which has headquarters in Malmo, Sweden. “We have followed the developments in Germany closely and have created tailor-made concepts that we believe will match the demands of German consumers. Together with a competent work force we should be able to increase our market share in Germany substantially.” N.Y. holding seminars on bedbugs The seminars address ways to identify the insects, low-cost methods of dealing with an infestation, and the various responsibilities of tenants, landlords and the City’s Department of Housing Preservations and Development. The final seminar in the initial series will be Wednesday, March 12. Bedbug infestations have been on the rise throughout the country, and New York City has seen nearly a fourfold increase in complaints during the past two fiscal years. In fiscal year 2007 alone, the city received nearly 7,000 bedbug-related complaints and inspectors issued more than 2,000 violations to building owners. By comparison, fiscal year 2004 saw only 1,800 complaints and fewer than 400 violations issued. Council member Gale Brewer, who helped create the seminars, introduced a bill in the New York City Council in 2006 that sought to ban the sale of used and renovated mattresses in the city. She and Council member Miguel Martinez have identified renovated mattresses as a key culprit in the bedbug problem and they are looking to target renovators in future enforcement efforts. EU revising Eco-label for mattresses The Eco-label initiative, a voluntary, multiproduct program developed by the European Union Eco-labeling Board, is designed to encourage manufacturers and consumers to make and buy sustainable products. Products that meet criteria stipulated for a specific product category can display the Eco-label “flower” (the European symbol for “greener” products) and consumers can purchase such products through the Eco-label Web site at www.eco-label.com. Only some mattress manufacturers in Greece and Denmark have qualified to display the label since it was established in 1998, according to the Web site. Criteria used in the revised Eco-label mattress program include: * Using materials produced in a more sustainable manner (defined by a life-cycle analysis) * Limiting the use of “eco-toxic” compounds * Limiting the levels of toxic residues * Limiting the contribution of mattresses to indoor air pollution * Promoting development of products that are more durable and that follow principles such as reuse, recycling and reducing energy use The proposed revisions set specific criteria for latex foam, polyurethane foam, wire and springs, coconut fiber, wood, textiles, glues, volatile organic compound emissions, durability and packaging. Lilly Management rolls out new program The program was developed by the consulting group’s personnel and is based on their years of experience in mattress operations. The four areas addressed are quilting, factory layout, floor operations and materials evaluation. “Anytime a factory operates at improved efficiency levels, the benefits quickly become obvious on the bottom line,” said Bob Sabalaskey, Lilly Management Group vice president of manufacturing and product engineering. “This program is dedicated to uncovering the hidden profits that exist in nearly every factory and to providing the platform on which a mattress operation can benefit from its own improved efficiencies year after year.” Through the program, LMG representatives visit the customer’s factory for a day to discuss a specific operation or problem and to review opportunities and options. Manufacturers receive a thorough, on-site review of their operations and are provided with a report that includes results, analysis and efficiency recommendations. The quilting evaluation, for example, includes a review of quilt sub-assemblies and patterns, SKUs, machine use and materials handling to reduce indirect labor. A factory layout evaluation covers product flow, materials handling and waste reduction. Floor operations evaluations can involve multiple processes, including the line load, mattress build, tape-edge, flanging, border sew and capping. Materials evaluations can include reviews of incoming raw materials, work stations, component costs and SKU efficiencies. Freudenberg finds success with its Celestia product An advantage of Celestia Stretch is that the engineered product can move with equal strength in all directions, according to the company. The fabric’s omni-directional fiber composition affords the same resiliency characteristics as the typical memory foam mattress. Ashutosh Karnik, marketing manager for Freudenberg North America, which has headquarters in Lowell, Mass., said Celestia Stretch differs from other products because its performance is based not only on flame-suppression but also on its ability to follow the actual movement of the mattress. Study: CelliantSleep claims supported Carpenter uses CelliantSleep in its Ambient line of pillows, mattress pads and other sleep products. The data comes from a clinical study conducted by researchers affiliated with the Long Beach (Calif.) VA Healthcare System and UCI Medical Center in Irvine, Calif. The magnitude of pain relief reported by participants using products enhanced with CelliantSleep was much greater than that reported by participants using placebo products, according to Carpenter. Carpenter and Hologenix LLC, the company behind CelliantSleep, sponsored the trials. The research team will prepare a manuscript describing the study results for submission to a peer-reviewed medical journal, according to Carpenter. Stork doubles testing capacity The lab now is able to offer customers all of the tests referenced in ASTM International’s F1566 standard for innersprings and box springs, including firmness rating, hexagonal roller durability, foundation impact testing and Cornell firmness retention. The company also provides interface pressure imaging, flammability testing and a broad range of material properties testing. Stork Twin City Testing provides the full range of mattress testing services to the residential (adult and juvenile), medical, institutional and hospitality industries. Omniflex upgrades films The films are designed as backings for top fabric layers in mattresses for use in the residential and hospitality markets. Transport films with Natural Elements are intended to be used in single, film-to-fabric laminations. Features of the films include a built-in anti-bacterial technology to kill microorganisms and infections, a barrier against liquid penetration and damage to internal mattress components, and breathability and comfort for the user. They are available in fire-resistance additive packages and recyclable formulations. Physician, magazine tout Carpenter The Sleep Better Signature Collection was created with Dr. Michael J. Breus, a board-certified sleep specialist, practicing psychologist and author of Beauty Sleep: Look Younger, Lose Weight and Feel Great Through Better Sleep. Breus and Carpenter developed the line of top-of-bed products at Carpenter’s Reinhart Technical Center in Richmond. The assortment includes pillows with snore reduction and aromatherapy properties, as well as hand-constructed mattress pads. The line also includes products for children that are designed to optimize restorative sleep and promote growth and development. In other news, Consumers Digest magazine has recognized Carpenter with its Best Buy award. “We have always known that the Beyond Down comforter, as well as the entire Beyond Down Collection…is the best alternative to actual down in the market. We are thrilled Consumers Digest agrees with us,” said Dan Schecter, vice president of sales and marketing for Carpenter’s Consumer Products Group. L&P: Cash up, demand weak “During the full year 2007, many of our domestic businesses experienced weak demand, which lowered our organic sales and training,” said David Haffner, L&P president and chief executive officer. “Even so, we generated record annual cash from operations, in large part due to an ongoing emphasis on working capital management.” L&P posted a fourth-quarter loss of $1.21 per share, including $1.44 of impairment, restructuring and other net charges. L&P’s full year loss was $.06 per share, including $1.26 of impairment, restructuring and offsetting items. In November, L&P increased its annual dividend by 39% to $1.00 per share. Earnings per share for 2008 are expected to be between $.95 and $1.30. Sales are projected to be approximately $4.2 billion—about 2% lower than in 2007. “We are eliminating one-fifth of our portfolio, largely through divestitures, which are proceeding as planned,” Haffner said. Total sales from continuing operations in the residential furnishings division, which includes domestic bedding products, decreased $114 million or 5% in 2007. Total sales from continuing operations in the specialized products division, which includes the Global Systems Group, increased $94 million or 15%. Simmons gives its Web site a makeover “We have set out to help consumers be as knowledgeable as possible as they begin the mattress shopping process,” said Tim Oakhill, Simmons executive vice president of marketing. “Simmons offers a wide range of bedding technologies. We want to help consumers make the best decision to meet their sleep needs and that starts with having information easily available to them.” Each of Simmons’ key brands— Beautyrest, Beautyrest Black, Natural Care, ComforPedic by Simmons and Simmons Kids—is directly accessible on the home page. Consumers also can shop for pillows, mattress pads and other sleep products, with the site providing links to accessory dealers. The site’s Sleep Tips section features content from sleep expert James B. Maas, author of Power Sleep and professor of psychology at Cornell University. The upgraded site also has brochures about getting a good night’s sleep for everyone, from teens to seniors, couples at home and travelers on the road. To help consumers who don’t know which mattress will best fit their sleep needs, Simmons developed the My Dream Bed quiz. United Feather products named Best Buys The products recognized include: the MicroMax Pillow, which the magazine touts as “one of the best down-alternative options we evaluated”; the Nature’s Preference Pillow by Select Comfort, a pillow made with patented Lyocell technology; and the Supreme Goose Comforter. “We’re always working to provide the best sleep experience possible through the highest quality fabrics, premium down and down-alternative fills, and the latest innovations. We’re honored to be recognized for our efforts,” said Brandon Palmer, United Feather & Down co-president. A Best Buy is defined as a product that offers the most value for a given amount of money. Pillows were assessed on their ability to provide support, the quality of the filling and cover, and the effectiveness of the pieced-together components. Comforters and blankets were judged on their ability to provide warmth without weight. Comfort Solutions on a mission “This is another sign of our network’s commitment to national unity and written confirmation of our dedication to quality across the board,” said Dave Roberts, Comfort Solutions president and chief operating officer. The mission statement includes four specific beliefs: * “We are an organization committed to designing, manufacturing, marketing and selling the best-quality sleep products commensurate to price in the mattress industry. * “We will be recognized and respected as a first-rate, top-tier organization. * “We will conduct our business in a professional and ethical manner, sustaining the values of integrity, respect and benevolence in all our dealings with customers, suppliers, employers and each other” * “The organization is committed to profitable growth that will ensure future viability and relevancy for the company and all its stakeholders.” Leggett revamps sleep Web site The site originally was created in September 2007 as part of the company’s Spring Alive Tour, a five-day, five-city tour of mattress retailers across the United States to educate them on the connection between quality sleep and good health. During the tour, the Web site featured a day-by-day text and video log that allowed people to follow the tour. The revised site continues its emphasis on education by keeping visitors up-to-date on issues that affect bedding professionals. The site also is more interactive with opportunities for sales associates to be involved in training, contests, giveaways and more. The site incorporates information and comments from several sleep experts, including Dr. Rubin Naiman, clinical assistant professor of medicine at the University of Arizona’s Program in Integrative Medicine and director of sleep programs at Miraval Resort; Kurt Ling, president of Customer Kinetics; and Craig McAndrews, partner in the Innovative Retail Group. “We want to provide several different perspectives on the industry,” says Joe Lyon, L&P vice president of national accounts and executive editor of the Web site. “This site is meant to be a place for conversation and an arena for provocative thoughts on the future of the bedding industry.” The company demonstrated the new site and its tools to retailers during the winter furniture market in Las Vegas. Kaymed pushing into U.S. market Kaymed now has a warehouse and factory in High Point, N.C., to service its U.S. clients, including the Badcock Home Furniture & More retail chain. Conor Sheahan, Kaymed’s new chief executive officer, has put together a team of 12 company representatives for the United States and four full-time trainers to work with retailers. The company also has stepped up its product line and sales tools. Introduced at the winter Las Vegas Market was its Sleep Scan, a body-imaging diagnostic for retailers. Instead of more traditional supine pressure-mapping systems, Sleep Scan scans the consumer’s body profile while she is standing. The system then recommends appropriate Kaymed mattresses. As important for the company, the Web-based system also compiles information from the scans that Kaymed can then use for product improvements. Kaymed was originally launched as the mattress division of longtime foam supplier Kayfoam Woolfson. Sheahan said that except for very limited, existing relations, the company will no longer supply foams to the industry. Mattress Giant celebrates 25 years Mattress Giant, headquartered in Addison, Texas, has more than 340 locations in 14 states, including 50 South Florida stores employing more than 150 people. “Starting here in Miami has allowed us to grow and attain dependable tenure in a highly competitive industry,” said Barrie Brown, president and chief executive officer. “The loyalty of our Miami-area customers has been a springboard to our growth across the U.S.” To kick off the celebration, Mattress Giant held a bedding sweepstakes, giving away mattress sets and bedding accessories to three winning customers. It also sponsored a bedroom makeover contest for one lucky winner. To draw even more attention, the retailer sent an enormous bed-on-wheels to travel throughout the Miami area and appear at community events. The window-paneled truck encouraged people to venture inside and test the enclosed bed. ISPA leaders hold summit with retailers “Our goal for this landmark event was to discuss the advantages of establishing a closer working relationship among the major sectors of the mattress industry value chain to expand the total market for mattress sales. We’ve achieved that goal and set the foundation for further action critical to our industry’s growth,” said Charlie Eitel, chairman and chief executive officer of Atlanta-based Simmons and ISPA chairman. The summit included extensive discussions on two major initiatives. First, building on the Better Sleep Council’s successful public relations efforts, participants explored the viability of embarking on an industry-wide marketing campaign to expand mattress sales. Second, participants discussed the formation of a national mattress industry sustainability initiative focusing on reducing the environmental impact of used mattresses. Health issues related to the sale of refurbished mattresses also were discussed. “In the spirit of ISPA’s overall mission, we can accomplish far more together than we can ever hope to achieve as individual companies or even individual industry sectors. Collectively we are setting the stage for an exciting future for the mattress industry,” said Dick Doyle, ISPA president and CEO. ISPA’s board will review the association’s options during its regular board meeting in March. Select Comfort’s numbers down in 4th quarter Net income totaled $2.2 million compared to $10.8 million in the fourth quarter of 2006. Net sales for 2007 totaled $799.2 million, a decrease of 1%, compared to $806.0 million in 2006. Net income for 2007 totaled $27.6 million compared to $47.2 million in 2006. “Weaker-than-expected consumer spending following the Thanksgiving holiday offset positive sales trends during the first two months of the fourth quarter,” said Bill McLaughlin, chairman and chief executive officer of Select Comfort, based in Minneapolis. McLaughlin said the company has implemented a number of measures in response to softening sales, including raising the price on some products to counteract higher costs for raw materials and eliminating approximately 20 corporate positions. Holding the company’s headcount at current levels is expected to save the company $4 million annually, he said. The company’s fourth-quarter sales did benefit from 36 new company-owned stores that opened during the previous 12 months, according to McLaughlin. And broader product distribution partially offset a 13% decline in same-store sales, much of which occurred in December. McLaughlin said he expects 2008 to be “a challenging year.” “The company is implementing additional initiatives to further address the current environment,” he said. “We plan to slow the growth of new store openings while investing in high-return store remodels. Moreover, we have focused our retail partner program on fewer regional mattress retailers, eliminating five partners and 140 doors during the first quarter.” New mid-range products were to be rolled out in February and a new marketing campaign is to be launched this month. The company did not provide specific earnings guidance for fiscal 2008. However, the company expects net income will be lower than 2007 on flat to slightly lower year-over-year sales. AHFA hosting flammability workshop On Dec. 27, the U.S. Consumer Product Safety Commission voted 2-0 to issue a proposed rulemaking on upholstered furniture flammability. Officials invited to speak at the workshop will address performance requirements of the new regulation, which focuses only on ignition of furniture by dropped cigarettes. Such incidents account for more than 90% of furniture fires. Previous CPSC staff proposals would have required furniture to resist open-flame sources such as lighters, matches and candles, as well. In a written statement, CPSC Commissioner Thomas Moore said he regretted that the agency could not also address open-flame fires at this time. Moore urged agency staff to conduct further research to identify safer flame-retardant compounds that would allow open-flame requirements to be added to the pending regulation. Those invited to speak include Dale Ray, the CPSC’s project manager for upholstered furniture flammability; Shivani Mehta, a CPSC staff engineer; and Allyson Tenney, CPSC directorate for engineering science. GSG unveils new work cells, technology Under its Porter International brand it is offering the Auto-Miter Work Cell, which automatically notches and sews mitered corners on pillow-top bed gussets. Another new Porter product is the FlexBorder Work Cell, which creates ruffles in the gusset of pillow-top beds. The automated functions improve tailoring quality, reduce tape-edge operations and reduce labor, according to the company. GSG also will display mattress packaging equipment from its partner companies Tecknomac and Merello. Teknomac will demonstrate its TK 306 Roll Pack machine, which rolls and wraps mattresses in a method that can reduce shipping and warehouse space by as much as 40%, the company says. The Merello ME 104 Auto Packaging Machine is a two-stage wrapping machine that can package three mattresses per minute. Merello also will demonstrate a new pillow packaging machine at EXPO. In total, GSG will demonstrate more than 30 machines in work cell formats to show mattress producers lean manufacturing methods. GSG is a division of Leggett & Platt, which is headquartered in Carthage, Mo. SHORTS Therapedic signs licensee Diamond Needle touts Organ brand Work on next Vegas building to begin Simmons & Big Tree partner Sleep America lauded Kingsdown shares ‘Abundance’ Research: Smoking impairs sleep
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