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HTT's Top 15 Supplier Giants

HTT's Top 15 Supplier Giants
(sales in $millions)

Rank Company Est. '06 Sales '05 Sales* % Change
1 Springs Global $2,252 $2,200 2.4
* Springs Global has revised its 2005 sales upwards since last year's Supplier Giants report.
Significant Events An uncertain U.S. economy, a falling American dollar, and a rapidly shifting retail environment were only the start of the daunting challenges faced by the nation's largest home fashions producer as it learned to deal with a demanding, cost-conscious new parent, Brazilian terry producer Coteminas, and a new organization structure as the U.S. partner in Springs Global. In a painful and continuing strategic shift, this major Carolinas employer shuttered plants and moved more production off-shore. And walking away from a challenging, money-losing business, the company cut a deal to sell its area rug business to C.S. Brooks, a long-time partner when it comes to spinning off unwanted operations. As if to emphasize who writes the checks and counts the dollars at Springs Global, Coteminas installed one of its own, Flavio Barbosa, with wide experience in Latin American banking, as chief financial officer. Thinning out the ranks of top management, Springs veteran Tom Gaffney left the company, along with Chris Baker, who resigned as chief of global sourcing to join rival WestPoint Home. In a major marketing shift, Springs did an about-face and opened up its showroom floor and its entire product line to all its customers, abandoning a recent practice of showing off product to a handful of key retailer partners on a selective basis.
2 WestPointHome $955 $1,239 -22.9
Significant Events Out of bankruptcy and under a new owner, financier Carl Icahn, WestPoint started to steer toward a turnaround with a fresh top management team, shuttering inefficient U.S. manufacturing plants, partnering with off-shore suppliers, and walking away from money-losing retail accounts. After years of tumbling sales, the company stabilized the top line during the second half of the year. Free of debt and with a cash infusion from its new owner, WestPoint acquired a Bahrain bedding plant, and is now negotiating to buy another off-shore bedding facility. Looking to spruce up its product lines, veteran Albert Sardelli was brought in as design chief.
3 Mohawk Home $624 $618 1.0
Significant Events Getting its arms around the big home business it built up over the past several years through a long string of acquisitions, Mohawk Home stabilized and grew its sales in its core competence, rugs, following a 6% slide in the top line in 2005. Driving sales growth was a 20% surge in bath rugs and a solid 4% gain in area rugs. But in businesses it understands less well, sales continued to falter, down an estimated 7% in throws and another 4% in decorative pillows.
4 Pacific Coast Feather $338 $337 0.3
Significant Events Just running in place is something of an accomplishment in a tricky retail environment and in a weakened environment for down. "Down comforters had a soft year," said Eric Moen, president, slipping by 9%, to $97 million from $106 million in 2005. But picking up the slack was a stronger bed pillow business, growing by 5%, to $136 million. An intense new focus is put on a portfolio of brands that now includes Cannon, Eddie Bauer, Calvin Klein and Sealy. The sheet business, while still small, virtually tripled in size in 2006 after getting a boost from Consumer Reports, which lauded its Sealy brand sheets.
5 Sleep Innovations $315 $290 8.6
Significant Events After years of stunning fast-track growth, 25% and more a year, it was inevitable that the pace would slow as this pioneer producer of memory foam products filled its niche and saturated the marketplace. Driving the top line this year was 12% growth in its core foam pillows/toppers segment, layering on an extra $30 million to reach $280 million. Sleep Innovations continues to expand placements with existing accounts, and is also generating new sales growth with its foam mattresses.
6 Hollander Home Fashions $303 $267 13.5
Significant Events Firmly taking the reins as ceo after the 2005 death of his father, Leo, who had built the company into a powerhouse, Jeff Hollander launched an aggressive makeover of the company, jettisoning the fashion business to focus on basics. "Even if you take that fashion business out of the numbers, sales of our continuing businesses were up 8% to 10%, exceeding our expectations," said Hollander. "We thought we'd do 6% or 7% as an increase." But this year growth will moderate, he said, in the range of 5%. Shucking off the fashion business, while taking a bite out of sales, "helps us use our resources, people and space better. More importantly, it's helped our profits."
7 Shaw Living $288 $276 4.3
Significant Events A relatively recent entrant into the ranks of the Top 15 home fashions suppliers, Shaw continued to grow in 2006, helped by a solid 5% increase in rugs, to $231 million, solidifying its position in that category. In area rugs, Shaw maintained its core programs, making small gains in market share, and continued to grow its imports. Bath rugs also grew by 5%, to $57 million from $54 million the preceding year, helped by imported cotton programs and improved business with top-tier retailers, including department stores.
8 Welspun $277 $182 52.2
Significant Events It was only a matter of time before this rapidly growing Indian terry producer broke into the top tier of U.S. home fashions producers, and it did so last year pushing sales up an impressive 52.2% to become the third-ranking U.S. producer, not that far behind Springs Global. If you want to know how feisty Welspun did it, just take a look at WestPoint Home, where towel sales were off by 16% last year, following an even scarier slide of 28% in 2005. And look at Welspun's towels piled high at Linens 'n Things. Not content to take a bite out of the towel market, now Welspun is setting its sights on sheets, growing its business there to $93 million, becoming the nation's fifth-largest U.S. supplier.
9 Maples Rugs $270 $260 3.8
Significant Events Still running ahead, if not as fast as years ago when it piled on strong double-digit growth, Maples grew its business by almost 4%, layering on an additional $10 million to the top line. All of last year's growth came out of the company's bath rug business, its smallest, which grew by 9% to $120 million from $110 million in 2005, helped by new placements generated by the Cannon brand. The larger area rug business was flat, however, stuck at $150 million, holding on to its core customers at discount and mid-level department stores.
10 Franco Manufacturing $260 $269 -3.3
Significant Events Growth can be tough to come by, even for fast-track companies, as markets mature — and faced with a tricky retail environment and sluggish consumer spending. After quietly flying under the radar for years, the notoriously private Franco dipped modestly, by 3.3%, to an estimated $260 million. Sales edged up slightly in its sheet business as core customers walked away, balking at dealing with a middleman. Sales grew at a stronger pace in kitchen textiles, by 4.4%, to $71 million from $68 million, holding their own at discounters and expanding distribution under proprietary retail brands.
11 Croscill $258 $258 0.0
Significant Events Coming down to earth and running in place after years of propulsive growth, Croscill ran flat at $258 million, holding steady after a drop of 5.1% the prior year. It was a painful year of rethinking and rebuilding following the sudden death of visionary ceo David Kahn the year before and the illness of the highly respected family patriarch Mike Kahn. With another Kahn scion, Doug, taking the reins, the company continued to move production off-shore. Sales, said Doug Kahn, held steady in each of the company's key product categories.
12 CHF Corp. $227 $213 6.6
Significant Events The window business continued to rack up solid growth, growing by 9% to $152 million, reported ceo Frank Foley, as retailers showed more interest in higher price points and trade-up items. There was solid growth in bedding as well, said Foley, "but unfortunately there was no such interest in higher price points." The bath business grew at an aggressive pace, helped by a growing accessories business. But a major sticking point, he said, was the Donna Karan Home business, which fell off in the range of 30%. "But we're working on that now and expect substantial improvement next year." A major task at hand, said Foley, is rethinking the CHF business model. "It no longer pays to deal with some people. You have to walk away from some of them. The reality is there's no value-added any longer in building market share. All you get these days is value-less. It gets you nothing to be the biggest."
13 American Pacific $215 $259 -17.0
Significant Events With the bottom falling out of the quilt market for most suppliers, and its comforter business falling off at a double-digit pace, the once high-flying American Pacific recorded a drop in sales of roughly $44 million. Despite a roster of designer licenses, comforter sales fell by 14% in 2006, to $164 million from $190 million, as some of those licenses ran out of gas at key accounts, making way for retailers' private-label brands. Playing musical chairs once again, the company appears poised to take on a new dance partner, reportedly readying its sale to an Indian textiles producer.
14 Dan River $190 $259 -26.6
Significant Events The latest U.S. supplier to fly under a foreign flag, straight out of bankruptcy Dan River was acquired by GHCL, a producer based in New Delhi. All of the company's remaining U.S. plants were shuttered, with goods coming in from India, China, and Pakistan. Securing a steady outlet for its product, GHCL then bought a U.K. retail chain, and said it's negotiating to buy a major U.S. home fashions retailer, as well as other chains in Europe. Building a beachhead in the institutional market, in December GHCL/Dan River acquired Baker Linen, a century-old supplier to the hotel and hospital trade. Letting retailers know it's still alive and kicking, Dan River put an astonishing 65-plus beds on its show floor during the fall home fashions market.
15 Lousville Bedding $175 $175 0.0
Significant Events Running in place despite declines in some of its key businesses, Louisville went through another "roller-coaster year," said Steve Elias, ceo. The gainer last year was the bed pillow business, where sales improved by 14%, to $50 million, helping to offset weakness elsewhere, notably the mattress pad segment, where sales fell 10% to $90 million. Running in place was enough of a challenge, said Elias, "in the face of retail consolidation, inventory management tightening at key retailers, overseas competition, and continued escalation of raw material prices." Elias said a focal point was pillows, where Louisville "made a number of changes that have enabled our operating efficiencies, putting us in a position to capture more market share at key volume price points."


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