Nearly two years ago, Tempur Sealy announced its plans to acquire Mattress Firm, the deal has gone through and we have details on how the combined companies, now called Somnigroup International, plan to move forward.
On a conference call last Thursday, Tempur CEO Scott Thompson outlined that the average Mattress Firm store has 50 slots, with 30 slots dedicated to mattresses that retail at $1,500 or more. Of those 30, a minimum of a dozen slots will be used for other mattress brands.
For mattresses that retail for less than $1,500, 18 slots are open for Tempur Sealy or Mattress Firm brands. That’s roughly 75% of the floor, at the maximum, but that could be less depending on the performance of the product, according to Thompson.
So how does the industry feel about this? Most are optimistic about the effects of the deal and are ready to move forward with business now that the deal is sealed.
“I think everyone in the industry is happy to see a resolution to the case,” says King Koil CEO David Binke. “It enables each of us to move forward with more clarity. The deal did not have an impact on our own strategy though, as we remain committed to a focus on innovation and luxury. More and more retailers are expanding their luxury collections and that means more opportunity for King Koil. We certainly saw that recently at the Las Vegas Market, where we saw strong traffic and interest in our products.”
Nick Bates, CEO of Spring Air, also says he is excited to see this is finally behind us in the industry; he’s looking forward to what other further mergers and acquisitions take place in the marketplace.
“Every new deal creates a new opportunity for the industry,” Bates says. “For Spring Air, we have always believed differentiation is the name of the game at retail. We excel at providing dealers with innovative product that helps them stand out in their marketplaces, which is what retailers most need now: product that is destined to really move that their sales associates are excited to present to their customers. We are also the only nationally licensed brand besides Serta/Simmons and Tempur Sealy that has the capacity to ship coast to coast, and we look forward to our continued partnership with Mattress Firm.”
Gerry Borreggine, CEO and president of Therapedic International, agrees, saying, “Consolidation has been and continues to be a normal part of business in this industry. Each of us must find a way to bang our own drum so that our message can break through and be heard. This recent development gives us each a chance to do just that.”
Bob Naboicheck, chief executive officer of Gold Bond, says solidifying this deal is a step in the right direction for the industry and allows us to keep business moving.
“For Gold Bond, this merger offers a unique opportunity for us to showcase not only our specialty, high-quality products, but also our loyalty to our retailers,” he says. “We provide our retail partners, whether they are brand new with us, or we’ve been working together for years, with exceptional customer service and products that stand out in terms of quality and longevity, like our popular two-sided mattresses and our unique futon offerings.”
Frank Hood, president and chief executive officer at Kingsdown, says manufacturers and retailers alike have had ample time to strategize their responses to the merger. A key takeaway for Kingsdown’s customers will continue to be earning their business through our Style and Substance strategies and tactics. Considering the opportunities that lie ahead, product differentiation and innovation, areas where we excel, will be even more critical in the evolving retail environment.”
Retailers are also staying positive. William Wellaur, co-owner of retailer ESC Mattress, says the effect on the industry is still yet to be seen.
“I wouldn’t want to be a TSI dealer right now, as there’s no incentive to buy from you,” he says. You buy Apple products at the Apple Store, and I feel like TSI is going to go after that narrative with the contracts they were pushing on small stores last year. It opens up a lot of opportunities for other brands to get in small-mid retailers — why would you just want to show all the same stuff you can see at Mattress Firm?”
Kelly Charles, co-owner of The Big Mattress Outlet, says retailers need to be aware of what’s going on in the industry.
“When my husband Joe was drag racing, the mindset was half the battle,” she says. “His best advice was to go out there and race your own race. Find the competitive advantages and run the heck out of them. That mindset served him well and earned him some championships, and I think of it often when I start worrying about the competition. Just as a drag racer needs to know the rule book inside and out and what’s under the hood in the other lane, at the end of the day, the race is won by being the best that we can be in each round. Each of our locations is its own race and needs to dominate its market. To do that, our focus will continue to be on taking care of every single customer with personal care and a touch that the big boys simply can’t duplicate. Our merchandising approach is proactive, not reactive, and the Mattress Firm acquisition doesn’t change that.”
Retailer Edward Collins, who was previously in the industry and is now returning with a new retail store, says that if all Mattress Firm stores commit 75% of their floor space to TSI products, it opens the door for retailers to offer brand diversity and selections that consumers are looking for. “We have been given an opportunity here and we must capitalize on it.”
The only unanswered question right now is about Serta Simmons Bedding, as they are the only one of the seven brand partners that do not have a post-closing agreement in place.
“At Serta Simmons Bedding we remain committed to our partners, delivering on our promises, building our brands and developing industry-leading products to bring to market,” says Jaime Wallis, vice president of communications for SSB. “We look forward to continuing our strong relationship with Mattress Firm in 2025.”
