Birds of a Feather

       

       

By David Gill

Being on the same page is a huge advantage when two companies in the same business decide to merge.

Pacific Coast Feather and United Feather & Down, whose merger became official just before last month’s New York Home Fashions Market, believe that they are not only on the same page. In terms of products, marketing and company culture, they are in the same sentence.

Fritz Kruger, Pacific Coast Feather’s vice president of marketing, said, “We’re similar companies. We want to do the same things in the same way. Our thinking and our mentality are together.”

Stephen Palmer, co-president of United Feather & Down with his brother, Brandon, said, “For us, when we look at all the critical points of the two businesses, it was evident that everything was complementary—the products, the customers, the culture, the people.”

The merger joined two companies with a combined history of more than 325 years in basic bedding. Both are family companies (Pacific Coast Feather is still owned by the Hanauer family, which founded it in 1884). It’s expected that the annual sales of the combined companies will top $300 million.

United Feather brings several advantages to Pacific Coast Feather’s table. “They have a core of fantastic products and brands,” Kruger said, citing in particular United Feather’s Dr. Maas and Sheex lines. “They have manufacturing capabilities that we don’t. They are phenomenal in down and feather processing. They have combined creativity and passion in product development. They can tap into our bigger portfolio of resources. Our size will help them in sourcing and logistics.”

For United Feather, working with Pacific Coast Feather’s resources is a huge benefit of this merger. “When we think of the possibility of driving our brands through the Pacific Coast Feather platforms, it’s really exciting,” Palmer said. The merger has “positioned our company to take advantage of all of the synergies between us, and prepare for the future.”

It will be the future that shows how much this deal will be a game changer for the basic-bedding market. “I don’t know if this deal changes the industry, but one thing is clear,” Palmer said. “Both the feather and down industry and the pillow and comforter industry had been characterized by small family businesses for many years. Now with the mergers and acquisitions of the past 20 years, today the makeup of the industry is different. The manufacturers are growing stronger by consolidating.”

That strength will be crucial to the combined Pacific Coast Feather-United Feather & Down organization as they face the industry’s current and future challenges. Some of these are on the competitive side. “There are, obviously, fewer retailers to sell to,” Palmer said. “Also, we’re witnessing some foreign companies that have their sights set on the U.S. market. For us, this merger is our repositioning to meet these challenges and the challenges of the future.”

Another challenge that will be ongoing is pricing. During last month’s market, much of the talk from vendors in all product categories centered on the continuing rise in prices of cotton and oil. Add to that, in the case of basic bedding, is the ongoing increases in prices for down and feathers.

“We’ll need more than ever to justify our higher prices,” Kruger said. “That’s why the timing is right for this merger. Competing on price is always a losing proposition. This deal brings excitement to the category beyond price.”