16/03/2012

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US mattress and upholstered furniture maker expect foam price rises

Bedding producers attending the International Sleep Products Expo in Indiana said price increases would leave the producers with limited options. "With significant price increases, products would need to be de-speced or bedding prices would go up," said Therapedic President Gerry Borreggine. "Neither of those moves would aid or abet increased business."He also said the timing would be "most inopportune" for his group, which just launched the most successful all-foam bedding line in its history.
Bedding producers suggested that significant foam price rises could push a USD 1,000 innerspring bed cushioned with some foam up to USD 1,099, while a foam bed could jump from USD 1,000 to USD 1,199, for queen retail prices. The bedding producers said the foam price hikes are coming in the wake of shortages of key chemicals, mainly TDI, used in foam production. Shortages that are expected to lessen in the months to come, when foam prices could moderate, but still remain at a higher level than they were earlier this year. Foam price increases would hit the bedding industry at a time of soaring sales of foam-based specialty sleep beds, which have gained share on innerspring beds, bedding observers said. Some suggested that foam price hikes could lead to more use of fibers for cushioning, and could also boost interest in innerspring models. Meanwhile, upholstery producers are also worried about the pressure they're going to get from retailers to hold prices stable. Dan White, President of upholstery maker Norwalk, said the past 18 months have seen a seesaw of price escalations and rollbacks in foam, and is heading up in double digits now. "So don't tell me inflation is under control," he said. "We had that absolutely nuts situation because of the shortage of cotton," he said, referring to the doubling of cotton prices earlier because of droughts and floods in cotton producing countries. "People started using more polyester so the price of that went up. Steel springs, everything is going up. We've tried to hold the line on price increases. We raised price once last year and will probably have to do so again this year. But if it gets really bad, we will have to do two."He added, "Consumers are more price conscious than ever. Retailers are crying for a price point, and here you have that pressure." Jim Wiygul, owner of Independent Furniture Supply, a foam fabricator in Tupelo, said that chemical prices rise periodically, "but this is the worst since Hurricane Katrina." He said foamers are expecting price increases of 17 % to 22 % due to shortages of the chemical. (Source: David Perry and Gary Evans , Furniture Today, March 15, 2012)

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