People are tossing and turning over this troubled economy.
Too bad they’re not out buying fine new mattresses to get a better night’s rest, says Bob Naboicheck, president and CEO of Gold Bond Mattress.
Gold Bond, a fourth-generation, 110-year-old family firm in Hartford’s North End, has felt the pinch of declining sales and responded by laying off nearly half its workers and slashing expenses to keep its doors open.
But Gold Bond is hanging on. Naboicheck continues to travel extensively to the company’s sales outlets and he’s kept company debt low. He’s definitely not giving up.
David Perry, executive editor at Furniture/Today, a weekly furniture trade publication that covers the mattress industry, said Gold Bond is “taking steps to stress the values its beds offer.
“The company’s hard work this year will be rewarded by some retailers, but it will be a fierce fight for business throughout the industry.”
The company saw its sales begin to fall in October 2007. “Our industry is so driven by home sales,” said Naboicheck. “Even those who are very wealthy are scared. People are scared. They’ve just stopped spending.”
Multiple Challenges
“As our business was tanking, raw materials went through the roof,” he added, noting that steel prices shot up 40 percent and foam prices have risen too.
Gold Bond’s sales were off 10-12 percent in 2008, which put the company in line with sales figures from the International Sleep Products Association. Through November, the most recent numbers available, year-to-date sales were down 11.5 percent in dollars industry-wide. November itself was a particularly abominable month, with a dollar drop of 29.2 percent.
Those bleak numbers were even too much for Gold Bond to overcome. The company had to dramatically slash costs, cutting its work force from 110 to 60, though some workers were starting to return to work last month.
“We let supervisors go,” Naboicheck said, noting that some of the casualties were second generation Gold Bond employees. “We let two people go who were here 25 years. It was sad.”
A turnaround isn’t yet in sight. “It will be a challenging 2009 and 2010,” Naboicheck said of the privately held company with sales in the $18 to $25 million range.
Karin Mahoney, a spokeswoman for the Sleep Products Association, said her trade group’s statistics committee expects the industry to continue to decline during the first half of this year before beginning a slow recovery in the second half.
“Overall, the committee expects that both 2009 units and dollar values will decline by a further 7 percent, compared to 2008,” Mahoney said.
Gold Bond Mattress started in Hartford in 1899 on Front Street by the Connecticut River. The neighborhood is long gone, but Gold Bond continues with its fourth generation of Naboichecks involved in the business. Since 1996 it has been located at 261 Weston St., just north of the Hartford Correctional Center.
“Gold Bond has a proud heritage as a mattress and futon producer,” Perry said. “Like any family owned business, it has had its ups and downs over the years. But the company has built a reputation as a producer of high quality, value-packed sleep sets.
“And Bob Naboicheck is certainly one of the hardest-working executives in the industry, traveling constantly as he personally handles sales training for his dealers. Bob is not a quitter, and he’s got too much history in his company to do anything other than to press ahead.”
Naboicheck said he’s on the road 26 weeks a year, buttressed by a sales staff of eight. “It’s a different perspective when the owner of the company comes in and explains how a mattress is made,” he said.
King Of Futons
Part of Gold Bond’s success has been driven by — of all things — futons. The company is the largest producer of futons in the United States, and it ships 400 to 800 pieces daily for sale in 40 states and five continents. By contrast, it ships 300 to400 pieces of conventional bedding a day.
Futons have held their popularity since their introduction in the 1970s with the alternative lifestyle set. Their functionality has sustained demand. L.L. Bean, for example, has sold a private label Gold Bond futon since 1982. “Every college kid thinks they should have one,” Naboicheck said.
And Gold Bond is Japan’s only foreign futon manufacturer.
Gold Bond sells 14 different products in 40 different sizes, competing against the likes of Sealy, the country’s largest bedding manufacturer with annual sales of about $1.2 billion.
Futons represent about 45 percent of the company’s sales dollars. “We don’t have thousand-dollar futons, but we certainly have thousand-dollar sets of bedding (at wholesale),” Naboicheck said, while giving a tour of his Weston Street facilities, which are combination showroom, manufacturing facility and general office space.
Gold Bond embraces a “just-in-time” philosophy for its manufacturing and shipping. “Everything you see on the floor will be gone by 3 p.m.,” he said. Two days after the company gets a bedding order, it’s shipped.
The process also helps retailers maintain their inventories, which in turn reduces their overhead. “We have a vested interest in making sure our customers are there tomorrow,” said Naboicheck. “The only thing we can’t do is be their bank.”
