Inquiring minds are asking Are Mattresses A Safe Cash Stash? I’s a good question too. So let’s explore with a point counterpoint.
How to safely store cash under the mattress
Bed manufacturer Feather & Black says New ‘safe’ bed allows savers to safely store their cash under the mattress.
Bed manufacturer Feather & Black is offering savers who have lost faith in the banks somewhere to keep their money safely – under the mattress in a concealed safe.
The company admitted it was a ‘tongue-in-cheek product’ but added that it was a serious proposition.
A small safe with a sturdy lock the compact box is big enough to store a stack of notes, securities or valuable belonging like jewellery. Covered with a valance or chunky throw the safe will remain hidden from prying eyes, the company said.
Robbie Feather, managing director of Feather & Black said: “Confidence in banks has hit an all-time low and fears of a recession crime wave have been raised by the Home Secretary. As a result people genuinely seem concerned about the safety of their money. “
Earlier this year it was revealed that sales of household safes have also soared as the ongoing economic downturn has seen the markets collapse and banks pushed into hasty mergers.
Mattresses Aren’t a Safe Cash Stash
The Wall Street Journal is taking the other side of the bet. Please consider Mattresses Aren’t a Safe Cash Stash.
The mattress industry apparently didn’t stash much underneath for a rainy day, and private-equity funds that flocked to the segment, counting on cushy cash flows, are taking big hits.
Simmons Bedding Co., the country’s second-largest mattress maker, has hired bankruptcy counsel and financial advisers as it looks for new backers. Otherwise, the company, which opened its doors in 1870, could file for bankruptcy reorganization, say several people familiar with the matter.
“All options are being looked at, and it’s not clear what will happen,” says a person close to the company. Simmons is best known for its Beautyrest brand and the brand’s TV commercials, which feature a bowling ball dropped on a mattress.
On Wednesday, mattress maker and retailer Select Comfort Corp. announced that it would delay reporting fourth-quarter earnings and has obtained an amendment to its credit agreement to explore “a range of strategic and financing alternatives to enhance its financial flexibility.”
Select Comfort is the country’s fifth-largest mattress maker and the largest U.S. bedding retailer, with about 475 stores nationally. In 4 p.m. trading on the Nasdaq Stock Market yesterday, its shares traded at 21 cents, down from about $4 a year ago. It had a $12.7 million loss through the first nine months of 2008 as its sales fell nearly 25%.
The problems at publicly traded Select Comfort and privately held Simmons are symptomatic of larger issues across the industry, which is suffering through its worst three years in four decades.
In previous downturns, industry sales usually dipped only 1%, and per-unit prices generally continued to grow at least 6% a year. Since 1970, mattress sales had dipped only twice before 2007, according to the trade group International Sleep Products Association.
Those characteristics made the industry attractive to private-equity buyers, which depend on steady cash flows to support the large amounts of debt they use to buy companies.
But this downturn has been far nastier. Sales and prices both fell almost 12% last year, and they are poised for a projected 9% slide this year, according to industry experts. Those shortfalls mean the companies can’t keep up with debt payments.
Although this is not an apples to apples comparison, the Wall Street Journal seems to have the better argument. I don’t advise storing money under the mattress, in the mattress or betting on bedding at all.
Mike “Mish” Shedlock
Click Here To Scroll Thru My Recent Post List