W. Simmons Mattress Factory adds brands – Tip Tricks
W. Simmons Mattress Factory Inc., operates three different businesses, each with its own set of challenges, said Wayne Simmons, president and chief executive.
By producing 300 to 400 beds and king size futon mattresses daily at its corporate headquarters here, the firm has inherited the manufacturer's headaches of costs, labor and insurance. It also bears the responsibilities of a wholesale division, fulfilling institutional and private label contracts. And by operating a 25-showroom retail division, Simmons must remain open on weekends and evenings till 9 p.m., plus assuming advertising costs and consumer obligations.
The wearing of those three hats, has made Simmons sartorially correct for the role of president of the International Sleep Products Assn., a post he assumed in March. They will try their best in improving the performance of this industry.
Simmons co-founded the firm with his father, Woodrow in 1959 and, a few years ago, received and declined an offer to sell the business. Instead, he placed the company's destiny in the hands of a "group of young bucks, averaging about 36 years old," headed by vice president and general manager Rob Woods.
That decision has worked well. Volume this year should hit about $16 million; $12 million at retail and $4 million in contract-commercial jobs. That would produce a 25 percent increase in volume this year on top of a 12 percent jump in 1989. The firm's five-year-goal, said Woods, calls for $20 million in sales and "a handsome return of 10 to 12 percent on Wayne's investment. Our prime objective will demand greater service orientation. We want to be the Nordstrom of the bedding industry," asserted the executive, who previously had been with Leggett & Platt for 13 years.
At one time the firm had considered diversifying into other home furnishings in order to grow sales. "We decided to focus on bedding--that's what we do best," asserted Simmons, and consequently the stores added the Simmons USA Beautyrest and Kingsdown mattress lines. Currently 75 to 80 percent of all bedding sold is said to be proprietary.
Discounting cannibalization of house mattress sales, Woods reported a net gain of about 10 percent in volume since taking on branded mattresses, projecting that could be pushed to 15 percent.
"Our share of the retail bedding business in southern California runs 4 to 5 percent," Simmons said. "That means that if 100 people were to buy a king futon mattress today, 95 wouldn't buy from us. Our focus will be on persuading them to do so."
W. Simmons has 25 strip-center, leased showrooms, averaging about 4,000 square feet. Orderly expansion of two or three showrooms per year will be the company plan, said Woods. Expansion outside this market also is possible, said Simmons.
Simmons' optimism about future growth seemed to fly in the face of some pessimistic industry production reports. "It's my personal feeling that there's been a shift in the distribution of the product, rather than a major loss of business," he stressed. "Everyone I know in the factory direct field or among independent mattress factories has been experiencing solid sales increases this year."
The firm, once an exclusive newspaper advertiser, has been testing some price-oriented television spots in certain markets as well as direct mail, which had been possible through cooperative ad dollars from its national brand makers. Simmons will spend $1.5 million this year in advertising. Simmons has been pondering downplaying the factory direct image of the company based on experiences reported by similar firms around the U.S.
"We want to get away from the discount image and reflect a perception of selling sleep and comfort to the consumer. I believe we'll see much more sophistication and less price promotion at the specialty store level in the future."
From inception Simmons has targeted the medium to upper medium mattress market. "The industry has been moving in the same direction because the profit is in higher end sales and we've even pushed ourselves a notch or two higher," reported the CEO. Noting Simmons had sold $1,000 king size futon mattresses when some scoffers said it couldn't be done, he reported moving kings today in the $1,300 to $1,400 range, about 10 percent of total sales with the average sale closer to $600.
Discussing future directions of the bedding industry, Simmons contended that it was "only a matter of time before a factory direct operation went national or before a major brand producer went factory direct." Explaining that many of the big names in bedding were losing sales and the volume being done by department stores was shrinking, Simmons maintained that, in contrast, specialty sleep stores were gaining strength.
"Factory direct and specialty sleep store will continue to become more sophisticated regarding customer needs and increase sales. Even though major companies have all this information about consumer wants, they must impart that knowledge to store sales personnel. But a few months after they've trained them, these sales people have gone on to other jobs. Big name companies don't have the direct control of sales personnel that we possess."