No Room at the Top
Jennifer Marks -- Gifts & Dec, October 3, 2005
I'm still wrapping my head around the Sleep Innovations phenomenon.
The foam giant expects to ring up sales of $350 million this year. Yes, a nine-figure revenue stream largely generated by foam pillows, mattress pads and mattresses. Talk about exploiting a niche.
Here's something even more interesting. If Sleep Innovations hits its mark, it will leapfrog into the fellowship of the top five U.S. suppliers of home textiles — alongside Pacific Coast Feather, Mohawk Home, WestPoint Home and Springs Industries.
Now consider this: What does it say about the complexion of the industry today that three out of the top five U.S. suppliers don't produce a single solid color sheet or towel between them?
I think we already know the answer to that one.
The situation also points toward the constant tug of war within companies between positioning themselves as specialists as opposed to one-stop shops.
As Sleep Innovations traveled the road to glory, it made pit stops in fashion bedding, blankets, tote bags and ancillary foam products such as coasters and games. Each time, it moved on fairly quickly, returning its focus to foam sleep products.
Mohawk Home, on the other hand, expanded beyond its core area and scatter rug business by adding throws, blankets, bedspreads and decorative pillows. So when Pillowtex fell apart two years ago, many expected Mohawk to seize the moment and plunge into at least the sheet and comforter business.
The fact that Mohawk decided to draw the line probably accounts for why its managed to hold its place among the top suppliers. It still addresses a lot of product categories; it just hasn't been lured in by the volumes in the big bed and bath arenas.
All of that said, Springs and WestPoint remain significantly bigger than any other leading U.S. suppliers — even after taking some hits on volume programs this year. In fact, they're arguably larger than any other home textiles producer or supplier in the world.
Each will probably rein in the top line over the next year to shore up the bottom line. Perhaps significantly so, we'll see.
As in the retailing world, there's room for only so many big guys. Some are specialists; some are generalists. I suppose we really shouldn't be surprised that such is also the case among suppliers.
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