January 15, 2018

Bullish U.S. mattress makers choose Greater Hartford as Northeast logistics hub

Photo | Contributed
Photo | Contributed
Hartford bedding maker Gold Bond Mattress is seeing larger bedding manufacturers open production plants in central Connecticut, to be nearer to their customers.
HBJ Photo | Gregory Seay
Corsicana Mattress Co. chose the former Fafnir manufacturing facility in Newington, to house its first New England factory to supply bedding to Mattress Firm and other retail customers.

Dealing with online sales

Mounting online sales-shipments of "mattresses-in-a-box" are creating sleepless nights for many bedding retailers. According to Furniture Today, the direct-to-consumer segment of the bedding industry doubled its retail market share to 12 percent from 2014 to 2016. That amounts to about $1 billion more in sales in the two-year period.

Some of America's leading bedding makers are waking up to the time and cost savings from centralizing mattress manufacturing in Greater Hartford, making it logistically easier and cheaper to ship finished sleepware to customers.

Their timing couldn't better, bedding experts say, as the improving U.S. economy puts more folks back to work and the recent federal tax cuts fatten consumers' wallets for splurging on homes, cars and their never-ending quest for a good night's sleep.

Corsicana Mattress Co. of Texas, among the 10 largest bedding makers in the U.S., has leased 212,000 square feet of the former Fafnir Manufacturing plant in Newington Business Park, to begin mattress production by Feb. 1, at the earliest, said Andrew Brecher, Newington's economic development director.

A Corsicana official said the company, which is investing $6 million to $8 million alone in mattress-making equipment for its 11th U.S. manufacturing facility — and its first of potentially more in New England — plans to ramp up to 150 to 160 staffers in two shifts as quickly as possible. Shelbourne Global Solutions LLC is Corsicana's landlord.

A year ago, billion-dollar mattress giant Serta Simmons Bedding LLC began developing a production facility at 140 Old County Circle, in Windsor Locks, to move bedding production and about 200 new or relocated jobs from its nearby plant in Agawam, Mass. The state of Connecticut pledged $8 million to assist Serta Simmons with its expansion and relocation.

Corsicana's and Serta Simmons' expansions also serve to reinforce growing demand for warehouse-distribution space in central Connecticut, which has emerged as a vital trans-shipment corridor for in- and out-of-state manufacturers, overnight parcel/freight haulers like United Parcel Service, FedEx and Roadway, and fulfillment/logistics operators such as Amazon and 3PL.

Both mattress giants compete against a smaller, well-established Connecticut bedding maker — Gold Bond Mattress in Hartford's North End. Also, East Windsor is home to a Northeast production outpost for Illinois' Blue Bell Mattress Co., maker of King Koil brand bedding.

Gold Bond and Blue Bell plan to significantly expand their brands in 2018, industry observers say. The Connecticut Department of Labor counts six bedding makers in the state, employing 326 in 2016 vs. 296 in 2011.

"The fact that two of the top 10 bedding producers have chosen Hartford-area locations for new bedding plants speaks to the Northeast growth plans that both of those producers are pursuing,'' said David Perry, bedding editor at Furniture Today, which first reported Corsicana's Connecticut expansion.

Domestic bedding

U.S. mattress production and sales have soared in recent years. Manufacturers shipped more than 41 million mattress and foundation units in 2016, up 3.1 percent from 2015, according to the International Sleep Products Association (ISPA). It was the seventh straight annual increase in units shipped since 2010, but still below the industry's 2005 peak, the Alexandria, Va., trade group said. 2017 mattress sales were also expected to be higher.

Along with household consumers, hotels/motels, hospitals, nursing homes and other institutional-care providers are a lucrative market for mattress makers because, aside from the sheer volume of bedding they need, they replace them more often, experts say.

According to bedding makers and industry analysts, mattresses and boxsprings are among the few consumer products largely made and sold in the U.S. If you've ever turned a mattress or helped move one into a home, it's easy to see why.

"It's a reality,'' said ISPA President Ryan Trainer. "We're dealing with a bulky, relatively light product that's difficult to handle.''

Among bedding makers, it's generally accepted, Trainer said, that mattress plants located no more than 500 miles away from their most distant customers can most efficiently distribute their products.

Transportation, or more precisely trucking companies and their associated fuel and labor costs, are one of the more onerous expenses associated with bedding production, said Bob Naboicheck, whose family has owned Hartford's Gold Bond since 1899.

The bedding industry is close knit, and Naboicheck said Corsicana searched for some time for a production site closer to New England than its nearest plant in central Pennsylvania.

Corsicana is a high-volume mattress maker with 2016 sales of $385 million (No. 6 in the U.S.) and a major supplier to Mattress Firm, with more than 3,500 U.S. stores, including in Connecticut and the Northeast, generating more than $3.5 billion in annual sales. Houston-based Mattress Firm, the nation's No. 1 mattress retailer, acquired Sleepy's for $780 million in 2015. Mattress Firm's stated goal at the time was to eventually offer same-day delivery.

The Newington plant, Naboicheck said, would put Corsicana much closer to its New England retail accounts, which ultimately should help it rein in transportation-distribution costs.

Shipping costs aren't as much of a factor for a relatively low-volume, private-label producer like Gold Bond, Naboicheck said. His firm has about 300 retail accounts spread across the U.S.

"Shipping always has been costly,'' he said. "Most manufacturers have plants no more than a day's drive to major mattress customers.''

New England gateway

Brian Morrow, Corsicana's executive vice president of operations, said between a dime to 14 cents of each $1 in mattress production-delivery costs is tied to transportation. Corsicana's Newington product will be what the industry calls "value bedding,'' compared to more luxurious models like Tempur-Pedic, Morrow said.

"You're shipping a lot of air,'' Morrow said. "A lot of [bedding makers] are trying to do the same thing, get closer to our customers.''

The acquisition of Sleepy's by Mattress Firm, Corsicana's largest customer, prompted development of the Newington factory, he said. Its nearest production plant to Mattress Firm's New England stores is one in Barnesville, Pa., that has been running flat out since the Sleepy's deal, he said.

Corsicana evaluated a number of regional production sites, from southern Massachusetts to southern Connecticut, Morrow said. But the Hartford region's proximity to major interstates as gateways to northern New England was a factor.

Ultimately, the Fafnir site afforded Corsicana space and amenities "conducive to our manufacturing style," he said. Corsicana executive Tim Sexton will manage its Newington plant.

Corsicana, which began in 1971 making furniture and bedding for mobile homes, is close to working out a financial-aid package with the state Department of Economic and Community Development, Morrow said. Neither he nor DECD, which confirmed it is working with Corsicana, would elaborate.

"So far, Connecticut has been really up front and not hard to do business with,'' Morrow said. "We're happy with it."

News Editor Matt Pilon contributed to this story.

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