SIC 2515
MATTRESSES, FOUNDATIONS, AND CONVERTIBLE BEDS

This category covers establishments primarily engaged in manufacturing innerspring mattresses, box spring mattresses, and non-innerspring mattresses containing felt, foam rubber, urethane, hair, or any other filling material; and assembled wire springs (fabric, coil, or box) for use on beds, couches, and cots. This industry also includes establishments primarily engaged in manufacturing dual purpose sleep furniture, such as convertible sofas and chair beds, regardless of the material used in the frame. Establishments primarily engaged in manufacturing automobile seats and backs are classified under SIC 2531: Public Building and Related Furniture; those manufacturing individual wire springs are classified under SIC 3495: Wire Springs; and those manufacturing padding and upholstery filling are classified under SIC 2299: Textile Goods, Not Elsewhere Classified.

NAICS Code(s)

337910 (Mattress Manufacturing)

337121 (Upholstered Wood Household Furniture Manufacturing)

Industry Snapshot

Producing more than 35 million units each year, U.S. mattress manufacturers make up a four billion dollar enterprise, according to figures released by the U.S. Census Bureau. Mattress and durable bedding revenues amount to a 14 percent share of U.S. household furniture sales at the manufacturer level.

The U.S. mattress market is generally considered mature. Based on Census Bureau statistics for 1997 to 2001, annual sales growth at the industry level tends to fluctuate modestly. Conventional wisdom holds that nearly everyone has a bed and that beds are replaced infrequently—on the order of once every 8 to 11 years, according to various industry estimates. Indeed, the International Sleep Products Association, an industry trade group, reports that replacements account for 70 percent of new mattress sales. Fifty percent of old mattresses, moreover, are reused by others, often transferred between family members or resold in the used furniture market.

As a result, mattress makers' growth prospects lie mainly in their ability to generate interest in new product launches and otherwise compel people to replace their existing bedding. Another growth generator is the expansion of the lodging industry (see SIC 7011: Hotels and Motels ) and other industries that require bedding products. As in many industries, mattress manufacturers also

seek out greater efficiencies and higher profit margins by buying out competitors in order to achieve economies of scale or access new markets.

Current Conditions

The U.S. bedding industry consists of more than 600 mattress companies operating at 700 sites, but the top five companies account for the majority of sales. Most mattress manufacturers are privately held. Including convertible beds, which are sometimes counted as upholstered household furniture rather than bedding, industry shipments in 2001 declined from $4.73 billion to $4.66 billion.

The Bureau of Labor Statistics reported that in 2000 the industry employed an average of 26,332 people, of whom 20,570 were production workers. As the number of separate manufacturing establishments has been trending downward for some time, the industry's employee ranks have actually grown moderately from 22,971 in 1997.

Product Marketing Profile. The growth economy of the mid- and late 1990s provided a hospitable market for mattresses and related products. Growth areas included premium bedding, especially mattresses touting special health-related benefits, and mattress sets featuring distinctive colors and fashion appeal. Overall industry shipments increased from $3.84 billion in 1997, to $4.24 billion in 1998, to $4.30 billion in 1999, and to $4.73 billion in 2000. Between 1997 and 2000, shipments of innerspring mattresses with polyurethane or rubber tops climbed from $2.13 billion to $2.72 billion, while shipments of foundations rose from $1.12 billion to $1.30 billion. Issues affecting the industry in 2004 included a significant increase in steel prices, which was expected to push mattress prices higher.

By a slim margin, twin-size bedding is the most popular in the United States and is responsible for around 31 percent of unit sales. Queen size is the second most common, accounting for approximately 29 percent of mattress units sold. Larger mattresses—especially king and queen size—have been the fastest-growing categories, encouraged by industry marketing efforts to equate larger mattresses with getting a better night's sleep. The vast majority—some 90 percent—of mattress sales are of traditional innerspring mattresses, with products like waterbeds, air mattresses, and futons supplying the remaining 10 percent of sales. Not surprisingly, the most frequent buyers of mattresses are couples with children. On the retail side, the largest share of mattresses is sold through general furniture stores, followed by specialty mattress stores, and department stores.

Industry Leaders

A handful of manufacturers garner the bulk of industry sales; the top four accounted for 60.6 percent of all U.S. mattress sales in 2002. The largest mattress producer in the United States, and by some reports, the world, is Sealy Corporation, headquartered in High Point, North Carolina. Sealy holds a 23.1 percent share of the U.S. mattress market. In 2003, this private company posted $1.18 billion in sales, a figure roughly unchanged from 2002. Employees in 2003 totaled 6,562. Kohlberg Kravis Roberts and Co. agreed to pay $1.5 billion for Sealy in March of 2004.

Serta, Inc. of Itasca, Illinois, is the second-largest U.S. mattress company, reporting $724 million in 2001 sales and a 15.7 percent share of U.S. mattress sales. Serta, which dominates the lodging market, is actually a licensing cooperative held by 12 regional manufacturers that license the Serta name and coordinate marketing and branding strategies.

Other major players in the industry include Simmons Company ($672 million in 2001 sales), which was acquired by Thomas H. Lee Partners in November of 2003 for $1.1 billion; Spring Air Corporation ($500 million); and Select Comfort Corporation ($458.5 million).

Further Reading

International Sleep Products Association. "About the Industry." Alexandria, VA, 2004. Available from http://www.sleepproducts.org .

Kunkel, Karl. "Bedding Players See Recent Acquisitions as Healthy." HFN, 15 March 2004.

Perry, David. "Sealy Posts Another Strong Year in 2002." Furniture-Today, 23 June 2003.

U.S. Census Bureau. "Statistics for Industry Groups and Industries: 2000." February 2002. Available from http://www.census.gov/prod/2002pubs/m00as-1.pdf .

——. "Value of Shipment for Product Classes: 2001 and Earlier Years." December 2002. Available from http://www.census.gov/prod/2003pubs/m01as-2.pdf .