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Mrs Lanna Switch

Bio Statement As the turn of the calendar ushers in the new year, it also brings with it myriad challenges for bedding manufacturers. The rapidattrition of furniture stores and high interest rates, coupled with the Persian Gulf crisis and a recession, look to check themettle of producers, as they search for ways to maximize their company in the third consecutive subpar year. Though theInternational Sleep Products Association has revised its projections and now calls for a 1.8 percent reduction in components alongwith a 1.8 percent increase in dollar sales this year, some bedding manufacturers said the industry will be lucky to achieve eventhose numbers. "The current economic situation puts a damper on 1991," stated the president of a cosmetics manufacturer. "And, ifwe go to war, then everything will change. We are going to get to work like never before to maintain our current business, nevermind grow it." Most producers will be showing new products at the Winter Homefurnishings Market in Dallas next week, howevercompetitive promoting and advertising, along with bedding in the $399 to $799 scope, will push the market in 1991, '' they said.Listed below are comments from manufacturers on this year's bedding marketplace and in their 1991 strategies. Don PellegriniPresident and chief executive, Spring Air "There are a great deal of uncertain factors right now. Consumer confidence in themarket is reduced, debt is at an all-time high, and we have a danger of war in the Persian Gulf, which hangs over the market likea black cloud. For the past nine or 10 decades, consumption has exceeded income, so common sense says there was a cooling-offperiod. "On the positive side, interest rates are moderating, mortagage prices have struck a three-year low and this will spuraction in home sales and home building, which will give an impetus for house furnishings and bedding sales. The first half will beslow, but I feel the next half will pick up. "Our game plan is calling for an increase of 10 percent in dollars and 4% in units.We'll get that, again, through smart promotions and advertisements, and concentrating on our powerful premium bedding lines. Ourlicensees are still powerful, and they'll play a significant role in our expansion for 1991." Bill Brey President, Restonic "Inthe long run, over the next six months, I think it's going to be more of the same--a challenging business environment. If theMiddle East situation gets resolved, it would result in a better market. If we go to war, the opposite could occur. But seeking toforecast beyond six months is difficult. "We are under the assumption that the marketplace will remain tough, so our situation isthat we will continue to grow by adding new accounts in 1991. We did it in 1990--our expansion was to double digits--and we havestrengthened our contract plan. We are going to continue to be promotional and assist retailers become promotional and reach thosestrong middle price points. We have to stay tough and aggressive." Roger Jasperson President, Englander Sleep Products "Naturally,everybody is talking about it being tough next year. The economy is down and people are being more cautious. "Our main challengefor the new year is still taking on larger and better new balances. When it's tough, the merchants are constantly looking forsomething different and new. Bearing that in mind, we are going to work harder using our Nautilus program, making sure we have gotall bases covered." Zenon Nie, Chief operating officer, Serta "I believe the sector will be extremely competitive in 1991--muchmore than it had been in 1990. I think units will be down 2% to 3%, and, at best, the dollar volume will probably be flat or maybeup 1 percentage. I feel the unit forecast from ISPA is shut, but I think the dollar figure of a 1.8 percent growth is a littleoptimistic. "For Serta, we will continue to develop all distribution channels while further strengthening our present ones. And wewill continue to fortify our Perfect Sleeper line." Malcolm Candlish President and chief executive, Sealy Inc.. "1991 is going tobe the third successive year in device sales in the business, and to my knowledge that's the first time in 30 years we've hadthat. The downturn will last in the first three quarters, but we'll see an uptick from the fourth quarter. There is a recession,but I do not buy that it was a result of the Middle East situation--it only emphasized it and made it thicker. "However, it isgoing to imply a shakeout for manufacturers and retailers. We're a marketing company, and we have to continue to do what exactlywe are doing, recession or no. We have to keep costs in line, and we must keep marketing and advertising our products. You don'tquit doing that merely because there's a recession in the economy. I've seen producers in other industries cut advertising in arecession. There's no way we'll do that." Don Robb, Vice president, sleep goods Eastman House "I think 1991 is going to be hard,but there is business to be had. It just must be done a bit differently. We've got smaller dealers that have not beenpromotionally oriented. They have been happy to sell bedding, and they understand they need to be a bit more competitive thanthey've been in the past. "I believe there are windows of opportunities which are still available--opportunities for companies oursize, as well as bigger ones. These are opportunities that haven't been around for years." Ernie Friedman President, King Koil"Business has accumulated some momentum over the previous six weeks, and usually if we encounter that, so do other people. Weexpect to end the year with a 9 percent increase in earnings. But there is no doubt that we are in a recession, by whatever titlethat you want to call it, and there is no question we will be in one for the next six months to a year. Just how long or how deep,well, everyone has different answers. Whatever happens in Iraq is going to have an effect. "So, we must become as aggressive as wecan. We are introducing some promotions as well as items. We attempt to respond quickly to the market, as typically license groupshave a simpler time than wholly-owned larger companies. We are incorporating a new 'tri-zone' constructed Posture Balancedmattress into our Posture Bond lineup. We'll be aggressively promoting this product into next year." Dick Mankamyer ExecutiveDirector, Springwall Mattress Co. "We believe the industry is most likely fairly near ISPA projections, which would be growth of 1to 2 percent in units and 3 to 4 percent. For Springwall, we would project an increase of 2 to 4% in units and 10 to 12 percent."But, if this downturn we're 'not in' deepens and lengthens, those things can change. Due to the chaos in the market, and with allthe significant manufacturers stirring up things, there is business out there for, and we are receiving our share by opening upnew traders. "In our Minneapolis plant, which services seven states, we opened 90 new accounts this year. Our Cincinnati plantopened 60, and also our Akron plant, 30 to 40. Our story is one of market share. We gained $6.5 million at a $2 billion market,which for us, being a second-tier firm is a large leap." Daryl Tarbutton President, Bemco Associates "I anticipate that anindustrywide reduction of 3.5 percent in units this calendar year, and that is going to expand into and throughout 1991. That isessentially based on doubt--that the Persian Gulf crisis, oil prices, new taxes, and a number of the various things that are goingon in the market. It is much different than it was during the six -year period from 1983 to 1988, once the industry saw a 30percent growth in business. "We are responding to the marketplace by introducing an updated ultra-premium line, as we would liketo keep our focus there. To directly respond to the deterioration in device sales, we are establishing a series of eight dealerpromotions throughout 1991--the first of which will be a Bemco Mattress Clearance Sale. "This will probably be backed bypoint-of-purchase, newspaper, and radio substances. We are trying to do things to help make dealer traffic, while keeping ourfocus on the ultra-premium bedding"