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White goods rivals clean up quickly

Scrambling fast to pick up the pieces and expand their own sales and market share, basic bedding producers have started to divvy up what's left of Pillowtex's $250 million basic bedding business.

The payoff could be substantial. "We think ultimately that our business could increase by 20 percent because of Pillowtex, but it's too early yet to know this for sure," said Jeff Hollander, president and coo of Hollander Home Fashions, Boca Raton, FL. If that turns out to be the case, it could be a windfall of $40 million or more for the basic bedding producer, which reported $211 million in 2002 sales.

Starting weeks ago, when it became clear that Pillowtex was on artificial life support, "We've seen a doubling and a tripling of certain programs — bed pillows, down comforters and mattress pads — where both we and Pillowtex have placements," said Hollander.

Bob Altbeier, senior vp of Down Lite International, Cleveland, similarly estimated that the death of Pillowtex will yield a double-digit sales increase. "I estimate that it will affect our business with a 10 percent to 15 percent increase"

But it comes at a high price, he was quick to add. "I think all of us would like to be in an industry that isn't bleeding so badly as this one is right now. Unfortunately, we've all seen the Pillowtex situation coming for a really long time, which isn't to say that it still wasn't dramatic, devastating and a tremendous blow to our industry when it finally did shut down."

Bob Hickman, vp, sales and marketing at United Feather & Down, Des Plaines, IL, said, "Sadly, we benefit, but I don't think it benefits anyone in the industry when a major U.S. manufacturer like Pillowtex disappears. This will just force a more rapid migration of the business offshore to places such as China."

Hickman added, "We will probably pick up 5 percent to 10 percent more business by the end of 2003."

Jerry Hanauer, chairman of Pacific Coast Feather, the nation's largest basic bedding supplier with about $353 million in 2002 sales, said his company could add in the range of 20 percent of sales, roughly $70 million, in the wake of the Pillowtex shutdown. "We believe we have a market share of about 20 percent, and we're picking up enough programs to maintain that."

And he has the capacity to do it, Hanauer emphasized. "We're moving some things around now to handle it."

When Pacific Coast picks up the business — this year or in 2004 — depends largely upon any given retailer's state of preparedness. "Some people saw the handwriting on the wall and planned it out well, and we'll start shipping them next year. But others didn't seem to see it coming, and they need it as fast as they can get it."

While everyone will get a taste out of the Pillowtex business, most in the double digits, one clear winner emerges, Hanauer thinks — Springs. "I would think Springs picks up the most. Clearly Springs."

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