Keeping the temper down

 In 2015-05

Share this story:

By Edward Martin

At the loading dock of a windowless industrial building on a side street in Mebane waits a 40-foot Evergreen shipping container. “Russia, or maybe China,” Kevin Damewood speculates as he approaches, unsure of its destination. Inside the building, those soon to be stuffed into the container are tortured to see how much abuse they can stand before breaking down. Machines inflict the pain. “Hey, Tony,” Damewood yells to a technician, “can you operate this thing?”

Tony Nelson settles at a computer. “He can set this up for any type of body,” Damewood explains, “a 112-pound person or a 250-pound person.” Hydraulic arms rhythmically prod the head, back and groin regions. Another device called a Rollator has a 250-pound barrel that relentlessly advances and retreats, squashing everything in its path.
Sleep is a tough business at Kingsdown Inc., North Carolina’s largest mattress maker. Punishing mattresses to test performance and endurance respects no rank. Some Kingsdown products sell for about  $16,000. They get beat up no less than models that retail for about $900, the low end of the premium, handmade-mattress industry. Damewood, an executive vice president overseeing marketing, pauses at the roller. “This emulates 10 years of you tossing and turning,” he says.
Mattresses have it tough here, not unlike the competitive outlook facing Kingsdown. Until about 15 years ago, mattresses were a commodity: “just a white rectangle” in the words of a trade-association executive. Branding wasn’t emphasized. Everything changed as Lexington, Ky.-based Tempur Sealy International Inc. and Minneapolis-based Select Comfort Corp. convinced millions of sleepers to switch to foam bedding, turning mattresses into status purchases. It’s a dramatic shift for Kingsdown, which long focused on making luxury bedding with innersprings, a technology dating to the 1860s. Competitors have consolidated, with the two largest companies having a 70% market share, dwarfing the North Carolina company.
“It’s a bit of a David and Goliath approach for us,” says Frank Hood, CEO of the nation’s 11th largest mattress maker. The Furniture Today trade journal estimates the private, employee-owned company had sales of $84 million in 2013. Hood won’t say officially, but hints they were closer to $130 million. That’s nightstand change for its two largest rivals. Hoffman Estates, Ill.-based Serta International and Atlanta’s Simmons Bedding Co., jointly owned by a private-equity group, had combined sales of $2.8 billion in 2013, while Tempur Sealy posted $2.1 billion, according to Furniture Today. The latter company was formed in March 2013 when Tempur-Pedic International Inc. bought North Carolina’s then-largest mattress company, Trinity-based Sealy Corp., for $1.3 billion. “Some people picture these guys as big, lumbering, slow-moving players, but they clearly dominate,” says David Perry, the magazine’s executive editor.
Kingsdown is not intimidated. In late February, Hood said it will forge into China, licensing Hong Kong-based mattress maker Roth Bedding Technology International Ltd., to open 500 Kingsdown-branded stores there by 2020, including 65 this year. Roth will make mattresses that carry the Kingsdown name. The venture follows three years of testing its Sleep to Live and other brands in China. “We’ve enjoyed a fantastic reception in China over the past few years,” he says. It’s Hood’s largest imprint on the Mebane company since he  replaced a veteran CEO in a messy succession three years ago.
Partial to open-collar white shirts and fashionable face stubble, Hood, 48, initially held information-technology jobs at several textile companies, then hit his stride in fast food, joining Winston-Salem-based Krispy Kreme Doughnuts Inc. in 1997, and Denver-based Quiznos Subs LLC in 2005. He arrived at Kingsdown in 2008, serving as chief information officer and in other positions before rising to CEO in 2012. His promotion came after the departure of Eric Hinshaw, who’d led the company for 31 years. In 2014, the company sued Hinshaw for unjust compensation, contending that he had paid himself more than $10 million in salary and bonuses over a decade, often without board approval. Hinshaw, 64, says the allegations are false and has countersued, contending Hood conspired to depose him. Hood says only “the lawsuit speaks for itself.” The matter is pending in N.C. Business Court in Greensboro. At Kingsdown’s 110th anniversary celebration last year attended by Gov. Pat McCrory, speakers never mentioned Hinshaw.
Now, in addition to expounding on corporate finance, foam densities and coil-spring wire gauges, Hood talks of creating “retail theater,” best illustrated by Krispy Kreme doughnuts rolling out of ovens dripping sugar glaze in front of salivating customers. “Mattresses are the only thing I know of that you purchase in a 15-minute period and then evaluate while unconscious,” Hood says. In bedding theater, customers sprawl on a sensor-equipped mattress while patented Kingsdown technology draws from 9 million body profiles to spit out 1,000 calculations that determine the best bed match. Sometimes, depending on where the chips fall, a competitive brand comes out on top.
It’s a brave new world for Hood. “When I came here, I said, ’Why don’t all mattresses look the same? They’re all going to have sheets on them anyway.’” Across the table, Damewood laughs and answers: Fashion-sensitive women strongly influence family mattress purchases. “When I first got here, we had a bunch of middle-aged men picking mattress fabrics,” he says. “Fortunately, they weren’t Green Bay Packers fans, or they’d probably have had that on them.” Now, Kingsdown advertising touts “high-end artistry” and “Parisian chic,” all, as if described by a wine connoisseur, “opulent, but not overdramatized.”
The intricacies of making and selling mattresses don’t daunt Kingsdown. Hood says he wants to more than double sales to $300 million — he wouldn’t specify a date —  partly by leveraging the company’s research efforts. Just off Mebane’s main street, from a century-old brick headquarters, it’s plunging into the future of sleep. Since 2013, Kingsdown has offered “smart” mattresses that respond to iPad apps, automatically adjusting to sleepers’ aches and pains and gently waking them at appointed times. In the talking stage: a $100,000 mattress made of organically grown materials such as cotton and wool.
Small wonder that Kingsdown is the pride of Alamance County’s Mebane, which has a population of about 13,000. “Kingsdown remains the only homegrown, homebred industry we have,” Mayor Glendel Stephenson says. A retired banker, he’s also a board member and praises its economic impact. Hood says about 90 of its 300 worldwide employees work in Mebane. “It’s not just making mattresses,” Stephenson adds. “It’s taking care of people.”
Kingsdown’s story prompted its selection as the state’s 2014 manufacturer of the year for companies with sales of $25 million to $250 million in a competition sponsored by McGladrey LLP, Cincinnati-based Fifth Third Bancorp and the N.C. Chamber. “We looked at growth, and they were up about 12%,” says McGladrey’s Steve Menaker, an audit partner in Charlotte and the Chicago-based accounting and consulting firm’s Southeast manufacturing lead. “We looked at innovation and what they’re doing to move forward, too. They also seem committed not only to selling their products, but putting back into their community.”
While Hood is detailing his strategy in a second-floor conference room at headquarters, back at the manufacturing plant, workers are steaming exotic mattress coverings to shrink out even the tiniest wrinkles. More than half of U.S. mattresses sell for more than $1,000, and customers who pay as much as $16,000 for a Kingsdown are picky. While the company faces about 450 domestic competitors, versus more than 900 in 2004, Hood says, competition has intensified in the pricier end of the business. Kingsdown, he says, will need some new wrinkles to keep from shrinking.
Sleep was simpler when Mebane Bedding Co. first stirred in 1904. Feather and corn shuck mattresses were the norm – just burn when fleas infested. Tar Heel farmers were abandoning their land for factories, and founders A.N. Scott and W.W. Corbett had a role model. Nearby, John Gant had started a cotton mill in 1880. Still independent and run by Gant’s grandson, Allen Gant Jr., Glen Raven Inc. thrives by designing fabrics appealing to many different sectors and adapting to market trends. “Kingsdown,” says McGladrey’s Menaker, “is very similar to Glen Raven.”
Mebane Bedding absorbed other mattress makers and suppliers, including in 1928, Royall & Borden Manufacturing Co. of Goldsboro and Cotton Belt Manufacturing Co. of Rocky Mount. Fiscal conservatism helped it weather the Depression, Hood says, but the company traveled down several dead-end roads. It tried vertical integration, including building its own sawmills and acquiring spring-making equipment so it could twist and temper wire. It acquired another mattress company in 1964, refocused on its core business and, in 1976, became Kingsdown, after the name of one its mattress lines.
In 1985, Kingsdown converted to employee ownership, which has helped endear it to Mebane. “It was more a philanthropic move, to create loyalty,” Hood says. It seems to work. Hood cites second- and third-generation employees, and Stephenson, the mayor, attributes Mebane’s relative prosperity partly to “the auspices and payroll of this company.” About 40% of U.S. mattress production occurs in the Southeast, where the relationship with cotton, textiles and furniture is a natural match, and inexpensive labor is plentiful.
Over the last 20 years, Kingsdown has adapted to a movement branded by some economists as sleeponomics, or the sales and marketing of slumber. Including prescription sleep aids, sleep clinics, treatments for sleep apnea and other disorders, it amounts to more than $20 billion in annual sales, according to industry studies. “Until about 1995, this was mainly an innerspring-only business,” Damewood says. “Then Tempur-Pedic came out with memory foam, and foam and springs coexisted. But since about 2010, innovation has been at a tremendous pace. We’re getting new customers, young kids that are not anything like baby boomers. So now you’ve got foam, innersprings, air and other technology that helps you understand health and how important your sleep is to it.”
Kingsdown created its Sleep to Live Institute in 2007 in Joplin, Mo., and plunged into sleeponomics. Robert Oexman, a chiropractor who often appears on television talk shows discussing sleep issues, heads the lab, which consults for other companies. In 2012, Hood moved the institute’s engineering and research-and-development functions next to Kingsdown’s Mebane headquarters. Studies by the institute and outsiders such as the Research Triangle Institute’s “Choosing a Mattress Using Actigraphy and Diary Reports to Identify a Mattress That Provides Best Sleep” might be sleep inducing. But Hood says the company has to defend its technology, particularly in countries such as Australia with stringent consumer-protection laws. “We have to be able to substantiate our claims, or the retailer can be held civilly liable.”
About 15% of Kingsdown’s sales are foreign. In addition to its headquarters, two manufacturing plants and a distribution center in Mebane, the company has plants in California, Florida, Oklahoma and Virginia, and it’s growing. It spent $2 million equipping a 100,000-square-foot leased manufacturing plant that employs 50 in Waco, Texas, and has licensees, contract manufacturers and other operations in 10 countries including Brazil, China, Italy and Malaysia. Keeping manufacturing near retailers is crucial, because of the cost of transporting bulky bedding. That has blunted inroads by low-cost Chinese manufacturers, who now have a 5% market share in the U.S.
Regardless of locale, selling mattresses as a status symbol and health aid has become nearly as important as innerspring counts or foam density. Taking advantage of a sweeping portfolio of buyer data is also key to Kingsdown’s future. The company has invested $5 million on research to pinpoint trends, creating a competitive advantage, Hood says. “We’re the only company in the industry that can tell you, the retailer, how many people came into your store that are male or female; how many are males or females that sleep with males or females; their weights; how many have lower back pain; what they do in bed — read, or work; do they have acid reflux; and if they give us their ZIP Code, we can tell the retailer where they live, what kind of magazines they read and their socioeconomics.”
Having a technical edge is key because most mattresses are sold in warehouse-sized showrooms of retailers that carry multiple brands. “A showroom might have 70 or 80 beds,” Damewood says. Twice, Kingsdown tried opening its own stores, but abandoned the concept because it competed with retailers selling its brand. Now, its only store is in Mebane. Kingsdown is fighting for not only consumers, but also the hearts of retailers.
“We compete with anyone who has a square-foot position on any retail floor,” Hood says. “We’re vying for space on that floor. It’s not unlike [companies] making cookies or coffee vying for retail space at a Harris Teeter or Kroger.” Kingsdown has marketing ties to the nation’s largest mattress retailers, including Houston-based Mattress Firm Inc., with 2,200 stores and $1.8 billion in sales in 2014, and Hicksville, N.Y.-based Sleepy’s LLC, with 1,000 stores and $1 billion in sales. “Simmons has about 3,500 accounts — stores — and we probably have a couple hundred,” Hood says, reflecting Kingsdown’s challenge to make itself known by the dominant retailers.
The rough-and-tumble marketing of mattresses is not for the prudish. In a survey of nearly 500 mattress owners, Dallas-based Sleep Like The Dead, a research organization, rates mattresses on eight criteria for sex. “Bouncy” needs no explanation. “Durable” mattresses resist sagging. “Allows discretion” means no squeaks. Nick Robinson, CEO of the research group, says Kingsdown gets a C+ overall. “The energy-absorbing action of the individually wrapped coils may limit a bounce effect.” Back at Kingsdown’s Mebane factory, the testing machine relentlessly rolls back and forth.

Some work in twos, their movements silently coordinated by years of repetition, flipping mattresses effortlessly, tugging coverings in place like tight-fitting, king- and queen-sized jeans. Sewing machines whir, staplers chatter and there’s the soft rumble of dolly wheels on polished concrete floors. What’s missing? Smell. “We use nontoxic, water-based glues so there’s no odor,” Damewood says as he ambles through a nearly 3-acre plant in Mebane.  About 35 workers toil here in the trenches
of the sleep wars.

Damewood is Kingsdown’s George Patton. “If you were Simmons or Serta,” he says, pausing at an innerspring mattress, “you might have one coil unit and one gauge of wire, and you’d tell your sales staff, ‘This is what we’re making, so tough luck.’ The same bed, I’ll have three or four different gauges of wire.” He sizes up a medium-build visitor. “Let’s say in your case you’re good with a 15 ½ gauge wire and you need 1,100 coils, with 1.8 density foam. No other bedding manufacturer in the world goes to these lengths.”
Simmons and Serta certainly would take issue, but it’s clear mattress battle lines shift regularly. Innersprings sagged with the rise of foam but are rebounding, Furniture Today’s Perry says. In 2014, innerspring mattresses outsold specialty mattresses for the first time in recent history, though Kingsdown is hedging its bets. It introduced three new foam lines at a winter home-furnishings show in Las Vegas. There are also hybrids, combining gels, foam, innersprings and other components.
Damewood steps around workers at the plant. At a station called Inline Comfort Support Analysis, a machine tests every mattress before shipping. At another station, workers assemble wood mattress foundations. “Yellow pine,” he says. “Too many knots, and it’ll break. Too damp, it’ll warp. Too dry, it’ll snap. These are just right, bulletproof. You could put a Ford F-250 on this thing, and it won’t bend.”
What goes into a $16,000 mattress, or even a $2,500 mattress, the average rolling into the big Evergreen shipping container? Damewood, who joined Kingsdown five years ago from similar positions at Sealy and Simmons, looks down at a competitor’s mattress seam and disses its quality. “See how the taping on the seam is sort of wavy?” Nearby, Kingsdown craftsmen hand stitch seams laser straight. “Some of these guys,” he adds, “are third-generation employees. That matters. Some of our buyers, like the Japanese, are extraordinarily picky.” Some mattresses have as many as 12,000 individually wrapped coil springs.
Wavy seams might not affect sleep, but attention to detail is crucial. About 15% of Kingsdown’s buyers “are luxury shoppers, the guys who show up in a Mercedes-Benz and want the absolute best,” Perry says. Others are influenced by price and health concerns. At another workstation, women embroider “Kingsdown” onto mattresses, classier than sewn-on labels or tags.  They’ll be covered by sheets, but Kingsdown’s top-line mattresses, Diamond Royale, use special, imported coils individually wrapped in muslin and then covered in silk, wool and natural cotton fabrics, all meticulously tufted by hand.
In a room off the manufacturing floor, a lush bed is rigged to test instruments. Kingsdown calls this its Sleep Smart bed. Inside it, a computer automatically adjusts nearly two dozen independent air bladders during the night. “When you lay on this bed, you and your sleeping partner, it says, ‘Hmmm, OK, he’s in bed now. What do we do?’” Damewood says. “As you toss and turn, the computer will readdress the air bladders and keep up with you, so your back is always in alignment. The bed keeps you horizontal, not in a banana shape.” Such technology might be retail theater, but it’s critical to Kingsdown’s survival. “We have our own software engineers, our own embedded electronics engineers. This company has survived 110 years on innovation. If we didn’t do all that, I think we’d be squashed by the big guys.”
At the factory, Damewood winds up near the loading dock. Dozens of mattresses are awaiting shipping. At Kingsdown’s headquarters, Hood ruminates about being squeezed between regional players and global giants like Serta and Sealy. “The challenge is, the big guys are getting bigger and the smaller ones are getting smaller or going away,” he says. “We find ourselves in the middle ground, clawing our way up. I guess you’d call us the disruptive alternative.”
Recent Posts
Contact Us

Questions or feedback? Drop us a message!

Start typing and press Enter to search