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Suppliers Faced Difficult '08

Early in the year as economic storm clouds were darkening, many suppliers asserted that a flat year would be a good year.

For the majority of the companies in HTT's annual Top 15 Supplier ranking, it was a difficult year.

Five of the Top 15 suppliers took a pricey haircut when Linens 'n Things filed for bankruptcy in May. Brentwood Originals was owed $3.5 million; Croscill, $2.1 million; Maples Industries, $1.9 million; Pacific Coast Feather, $1.6 million; and CHF Industries Import, $1.1 million.

Each reported sales either down or flat for the year.

The sole sales gainer among the Top 15 was Welspun USA, which climbed a notch to the No. 4 spot. Early in the year, the Mumbai-based parent company opened bedding production in Mexico and India. Shortly thereafter, Welspun began manufacturing bath rugs at a new plant in India. At the beginning of 2008, Welspun also picked up the Waverly license for bath towels, bath accessories; and bath, accent and scatter rugs; down and synthetic filled comforters and blankets; pillows; and mattress pads.

Overall, the Top 15 suppliers lost more than $600 million in sales in 2008, falling from $5.7 billion in 2007 to $5.094 billion in 2008.

Double-digit sales declines were reported by:

  • Croscill, which late in the year sold to equity firm Patriarch Partners after 62 years as a family-owned business;

  • Brentwood Originals, which took a hit from both the Linens 'n Things and Mervyns liquidations;

  • Hollander Home Fashions, which dropped programs in the face of raw material increases;

  • Pacific Coast Feather, also hit by LNT.

Single-digit fall-offs were reported by CHF Industries, an LNT casualty that managed to maintain strong sales until the Wall Street implosion in September; Sleep Innovations, which filed for bankruptcy in October and plans to emerge in early 2009; Louisville Bedding, hampered by the consumer pullback in spending; and Divatex, which added new business but not enough to compensate for LNT.

Major rug suppliers in the Top 15 managed to hold the line — just — thanks to broader distribution. Mohawk Home, Maples Rugs and Shaw Living each reported flat sales compared to 2007. A broader spectrum of channels to pursue as well as the ability to service discount helped make up for sales shortfalls elsewhere.

Springs Global at $1.1 billion is still significantly large to hold its first place berth on the ranking. Welspun — the only high growth company currently on the list — trails by more than $700 million. Still, Springs is well off its 2003 sales peak of $2.4 billion. With Brazilian headquarters determined to shift more attention to other global markets, Springs' share of market — even at No. 1 — is likely to continue eroding.

WestPoint Home, falling this year to the No. 3 spot, faces a similar challenge as it repositions under a new management team. Through a combination of ditching unprofitable business and losing out on some retail-direct programs, WestPoint now generates less than half the sales it did three years ago.

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