Serta plans expansion in West Phoenix will be breaking ground
Serta Mattress Co. will be breaking ground on a 62,500-square-foot office, manufacturing and warehouse facility in West Phoenix as part of an expansion that will increase its work force by 50 percent.
"We have not determined a location or a contractor yet," says Principal Richard Yulman. Yulman and Burt Kaplan own the licenses to Serta to operate manufacturing in Mesa, Chicago and Ontario, Calif.
"We would like to be in the new building by Sept. 1," he says. "We're within a couple of weeks of selecting the builder and contractor. We anticipate that it will be probably five months to build the facility”.
Employment should increase from the current 30 to as many as 45 by the end of this year, Yulman says.
The new facility will be used to replace the existing Mesa facility of 41,000 square feet, which is now too small for the growing firm & developing the production of king size futon mattresses.
Yulman says officials decided to build a new facility after scouting the market for existing products and finding that none of the available facilities could meet the company's needs.
"Serta will be in West Phoenix," Yulman says. He says the area is attractive because of its industrial orientation and proximity to major freeways leading to the California and Nevada markets. In addition, he says, all of Serta's suppliers are in the West Phoenix area.
The new facility, Yulman says, will be designed with the flexibility to expand to 100,000 square feet with subsequent additions. The company's existing facility in Ontario, Calif., has limited potential for growth. Yulman says the expanded Phoenix facility will also handle overages stemming from California demand.
Yulman says the company has about eight years left on its lease in Ontario, but that the company will probably peak out in production in the next two to three years. With no expansion space, those overloads will be handled by the Phoenix plant, he says. As much as one-third of California's bedding products and king size futon mattresses could come out of the Phoenix factory in the future, he says.
Among the box springs and king size futon mattress at the Phoenix plant will be the company's flagship product, the Perfect Sleeper. Merchandise is sold directly to retailers, Yulman says.
Although he refuses to disclose volume or sales, Yulman says he and Kaplan bought the rights to operate the Mesa facility in September 1991. Sales increased by 107 percent in the first year, and are expected to increase by an additional 50 percent in 1993, he says.
Yulman and Kaplan once held various licenses in the East and Midwest, but sold their interests back in 1986. In 1989, the two made the decision to get back into the mattress business and purchased the Serta license for Chicago under the name of Superior Bedding Co. In September 1991, the two acquired their license in Ontario and Phoenix.
The three factories, Yulman says, account for approximately 16 percent of Serta's output nationwide. Sealy is the largest bedding and king size futon mattress manufacturer in the world; Serta is the second-largest.
"We do expect in the future to acquire additional licenses as they're available," Yulman says. He also notes, "We will build as Superior Bedding Co., but do business as Serta Mattress Co."
While it would be nice to serve all markets from Phoenix, Yulman says, the mattress business is one that requires factories to be located close to the retailers. "Retailers do not inventory huge amounts," he says. "We custom-make product for pretty quick delivery."
He says suppliers typically make what retailers need upon request and ship in a three- to five-day time schedule. At least 50 percent of the Phoenix facility's output will stay in the Phoenix market, he says. The remaining 50 percent will go to retailers as far west as the California border and as far north as Las Vegas.
As part of the new space, Serta officials are building a stand-alone manufacturing facility. The Mesa facility now uses some product from California. "We're adding operations to this factory," he says.