WHEN it comes to the bedding business, Dallas-based Pillowtex Corporation is no featherweight.
But even an industry titan like Pillowtex can rely too heavily on its domestic market. So to keep sales growing, this producer of bedpillows, mattress pads, designer bedding and down comforters is rushing into foreign markets. Along with neighboring Mexico and Canada, Pillowtex's global strategy includes China, the Far East, the Middle East, and Europe.
Behind the push overseas is the trend in the United States bedding and textile industry toward more natural-fill products. These are expected to puff up future growth. Though Pillowtex controls more than 50 percent of the $255 million wholesale domestic pillow market, industry experts expect this core market to remain relatively flat.
Initially, Pillowtex's foreign forays concentrated on Canada and Mexico, where it could grow fastest by supplying the retailers it already served in the US.
Late last year, the company purchased Torfeaco Industries Ltd., a century-old maker of fashion and basic synthetic bedding products in Toronto. This positioned Pillowtex, which has revenues of $273 million in 1993, to step up growth in Canada. Major constraints had included duties and exchange rates, freight costs on shipments from its plant in Hanover, Pa., and Canadian retailers' preference for domestically made products.
Pillowtex aims to use Torfeaco's expertise in designer bedding to bolster its presence in this more profitable area. ``It's the best of all worlds,'' says Charles Hansen Jr., chief executive and chairman of Pillowtex. ``Our Hanover factory [will be freed up to] sell more products in the eastern part of the US, and the products we manufacture in Canada become more profitable because they are made in Canada.''
Growth in Canada and Mexico is expected to be the driving force in raising Pillowtex's international sales to 8 percent of 1994 revenues, estimated at $360 million by some analysts. Mr. Hansen says he would like to see international sales climb to more than 10 percent within five years.
Bed pillow sales in the US rose just 1 percent in 1992, according to the latest figures from Home Furnishings Daily (HFD), a weekly industry publication in New York. This contrasts with 1991, when bed pillows were one of the fastest-growing sectors in the home-textiles industry.
``Pillowtex is wise to pursue opportunities overseas,'' says Sam Adler, textiles editor of HFD.
Hansen says he hopes to quicken the sales pace in Mexico and take advantage of the growing demand for American-made products. Pillowtex already sells to nearly every bedding retailer in that country. It is involved in a Mexican joint venture that manages all sales and marketing activities there.
While the initial goal is to increase sales to the Mexican market, Mexico also provides a gateway to Central and South America. ``We are already shipping products to Brazil, Argentina, Chile, Equador, and several other countries in this region,'' notes Jeffrey Cordes, the company's vice president for administration and planning.
Next on the agenda are China and the Far East, where pillows are in short supply. ``Since we import millions of pounds of down and feathers from China each year, we know they can make all the down pillows they will ever need,'' Hansen says. ``What we can provide are polyester pillows.''
To overcome the problems of exporting competitively priced products to the Far East, Pillowtex is exploring a joint venture to manufacture in China.
Pillowtex also is aiming to export more to Japan, where it currently sells only its highest-quality bedding, such as its Ralph Lauren licensed products. The problem, however, is Japan's distribution system, which has stymied many American exporters.
In addition, Pillowtex is targeting the Middle East. ``We already export to the Gulf states,'' Hansen says, ``and their free-trade agreements enhance the flow of imports.''
Europe has proven tough to crack because each country has its own packaging and size specifications. However, Pillowtex has a growing presence in Spain, Turkey, and Greece.
Back home, Pillowtex is attracting the attention of Wall Street. The company, which had pretax earnings of $11.4 million in 1992, went public in March of 1993.
Pam Singleton, who follows Pillowtex for Merrill Lynch & Co., says the company's projections are conservative, noting that in addition to Torfeaco, Pillowtex purchased two blanket companies in the US in 1993, making it a more complete source of basic bedding.
She says she is looking for 1994 pretax profits to rise 37 percent, to $30 million.