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From Home Furnishing Business

Mattress Firm Inks New Agreement for Serta, Beautyrest Brands

Specialty bedding retailer Mattress Firm, which ended its relationship with Tempur Sealy International (NYSE:TPX) earlier this year, announced Monday it has signed a new five-year supply agreement with Serta Simmons Bedding.

Under terms of the agreement, the retailer and the manufacturer will make a $100 million "joint advertising investment" over the next 18 months to launch several exclusive Serta and Simmons Beautyrest products in Mattress Firm stores.

Mattress Firm said the $100 million is in addition to its regular advertising expenditures, and will build on the brand-building advertising efforts recently launched by Serta Simmons Bedding.

The retailer has carried the Serta and Beautyrest brands for years, but the new agreement represents a significant expansion of that relationship, according to Mattress Firm officials.

"As a result of our recent partnership changes, we now have more flexibility than ever before to bring exciting and innovative products in all price bands to our customers," said Ken Murphy, Mattress Firm's president and CEO. "With the consolidation of all of our stores under the Mattress Firm banner nationally nearly complete, we can now focus fully on improving value for all consumers, while driving the business forward." 

Mattress Firm, which has about 3,600 company-owned and franchised stores in 49 states, has completed a number of acquisitions in recent years, including its two largest retail competitors, Sleep Train and Sleepy's. Mattress Firm itself was acquired last fall by Steinhoff International in a blockbuster $3.8 billion deal.

The retailer didn't provide details about the new Serta and Beautyrest products, but said the new agreement "builds on SSB's success in both the memory foam and hybrid mattress product categories with Mattress Firm," noting that SSB products have become its fastest-growing product lines in the past year.

Tempur Sealy officials have said their products will be off Mattress Firm sales floors by the end of March. Mattress Firm had been the company's largest customer.

"We strongly value our partnership with Mattress Firm and are excited about the additional marketing investment which we believe will drive further consumer demand and expand our leadership in the marketplace," said Michael Traub, CEO of Serta Simmons Bedding. "With Serta and Beautyrest, we have two of the strongest sleep brands in the industry and we look forward to expanding our product presence in Mattress Firm stores this spring."

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