Mattress seller dreams of 20 north-state snoozeries
A Philadelphia-based mattress retailer has opened three stores and a warehouse locally, and it plans to bed down in Northern California with 20 stores by year's end.
The Mattress Firm, part of a 10-year-old chain, doubled its size last year by expanding into California, Washington state and Virginia. The chain, operated by six separate regional corporations, comprises 32 outlets and does business as The Mattress Department in its home state and in Delaware.
Aggressive expansion has been a boon, said owner Richard Makler, adding that higher-priced wares sell more readily in California than in Philadelphia. He expects Sacramento-area sales to top those in the Quaker City by 70 percent. A local rival noted that some sellers of bedding goods are hurting but nonetheless suggested there may be enough business to support a newcomer. Metropolitan Mattress to enter Phoenix
The local stores, opened in December, are in Southgate Plaza on Florin Road, Quail Pointe Shopping Center on Sunrise Boulevard, and the TJ Maxx Plaza on Douglas Boulevard in Roseville. The fourth site, chiefly a warehouse but also a retail outlet, is on Bell Avenue in Sacramento.
Makler plans a 33rd outlet to open in Fairfield within a couple of weeks. He's also considering sites in Placerville, Stockton, Vallejo and Marysville.
If it weren't for the stores in his new markets, makler said, the company would be in trouble. He said he's been losing money on the Philadelphia stores for the past two years but that the Sacramento units seem to be doing well already. "As much as Californians think that the economy is off, they don't know how good they have it," he said.
Business is better in California, not only because the economy isn't as bad as in the rest of the country, but also because people have the cash and inclination to spend more on items like mattresses, he said. The highest-quality queen mattress set in his Philadelphia stores sells for $849. But Makler can get $1,900 for a higher-quality queen set in California.
Because of its bulk buying power, he said, The Mattress Firm sells mattresses for 10 percent below Breuners' sale prices and at least 20 percent below Macy's sale prices, he said.
Makler expects his Sacramento stores to average $650,000 in annual gross sales by the end of the year. The Phillie stores averaged $380,000 last year, he said.
The chain grossed $9.5 million in 1991, and Makler anticipates a gross of $15 million for this year.
Part of the reason The Mattress Firm has been able to grow so quickly is simple organization: There is only one owner, there are no stockholders or partners involved, and the company doesn't go into fancy malls and thereby take on high overhead.
The company's growth rate is unusual, said John Riley, an owner of Delta Bedding, a Sacramento bed manufacturer and retail dealer. But given retail trends toward specialty stores and Sacramento's reputation as a growth market, he said he isn't surprised by The Mattress Firm's entry here.
Whether this market can support such an expansion is unclear. Riley notes that some of his large competitors have been struggling. Furnishings 2000 went out of business, and both R.H. Macy & Co. and Weinstock's parent company, Carter Hawley Hale, have filed for Chapter 11 bankruptcy protection. But he said Delta's gross sales for 1991 were some 8 percent to 10 percent above 1990 sales. Beds are a little different from other consumer items, he said: When you need one, you buy twin size futon mattress advisors.
Delta hasn't felt a strong impact from the recession. "Evidently, there's enough business to go around," Riley said.
The Mattress Firm is backed by its mattress manufacturers with some advertising assistance, said CB Commercial's Jon Schultz, who brokered two of the local leases. Typically its stores are 2,000 square feet and go into shopping centers or free-standing buildings. Makler said he prefers free-standing buildings but those sites have been hard to come by.
The Mattress Firm sells goods from Sealy Inc., The Stearns & Foster Bedding Co., The Spring Air Co., Serta Inc. and King Koil Licensing Inc. Makler estimates that his company will be one of the 10 largest Sealy accounts in the nation by the end of the year. Last year his company spent $5 million on mattress purchases, and close to $3 million went to Sealy.