Sleep chain thrives in Calif. competition
By Larry Thomas -- Furniture Today, September 3, 2001
MONTEBELLO, Calif. — MONTEBELLO, Calif. — With its sky-high media costs, logistical headaches and expensive real estate, the Southern California market has claimed more than its share of casualties among bedding retailers.
Plain and simple, it's a tough place to do business, and the competition is fierce.
But throughout all the turmoil, one chain of bedding stores — Sit 'n Sleep — has managed to survive and thrive. In fact, it's not much of a stretch to argue that the success of Sit 'n Sleep is one of the reasons so many others have failed.
Each of its large, well-merchandised stores is supported by a heavy blanket of radio and television advertising. Shoppers are promised courteous treatment, prompt delivery and competitive pricing. And behind the scenes is a team of crack operations people who know how to efficiently navigate the region's notoriously clogged freeways.
"We've been very fortunate," said Sit 'n Sleep President Larry Miller, who appears in all the retailer's broadcast advertising. "The recession has not hurt our business as much as other businesses."
Despite this year's economic slump, which has slammed into the home furnishings industry with hurricane force, Miller said his company's revenues should be higher this year. That's partially due to a new store — Sit 'n Sleep's 10th — that opened in June, but it's also due to the successful business model from which Miller hasn't wavered.
Instead of opening dozens of smaller outlets throughout the sprawling Los Angeles basis, Sit 'n Sleep has opted for large stores — typically 12,000 to 15,000 square feet – in high-traffic locations that usually are visible from a freeway.
The company's newest store in Oxnard, for example, is near the Ventura Freeway (U.S. 101) in a building that formerly housed a Gap store, while the Montebello store on is off the Santa Ana Freeway (Interstate 5) and has Home Depot as its next-door neighbor.
In fact, Miller says the company's only economic wounds this year have been self-inflicted. The retailer spent much of the second quarter installing a new computer system, and, while it is superior to the former system, he admitted the transition was difficult and service suffered a bit.
But once the bugs were out of the system, Miller tried to remedy the situation by humorously discussing the problems in a series of ads.
And he believes the message is getting out. He described July sales as "excellent" and said August "has started out like a house of fire."
"Those commercials turned what could have been a very negative business situation into a positive one," said Miller.
He said no additional stores are planned for this year but insists he isn't scaling back on expansion plans because of the economy. The company's existing distribution center simply can't handle additional stores, so he's searching for a much larger one.
Once the new center is in place — he's hoping to have it done by the end of the year — additional locations could be added in 2002 or 2003.
Sticking with the plan
"I'm kind of holding my breath because of the economy … but if you pull back on your plan, it can become a self-fulfilling prophecy for failure," he said.
The retailer's product mix, which includes eight mattress brands and upwards of 100 SKUs on every sales floor, continues to be tilted toward the high end. That has made Sit 'n Sleep something of an poster child for luxury bedding in recent years, and Miller said he intends to continue focusing on upper-end products.
The retailer's most recent addition in that category is Nature's Rest, a latex bedding line whose queen-size sets typically retail for $1,000 to $2,000 or more.
Sticking with the plan also means the continuance of a comprehensive sales training and retention program. It's not easy to get hired by Sit 'n Sleep, but those who do routinely make $50,000 to $100,000 per year.
Plus, there are perks like golf outings, fishing trips and lavish banquets that award Cartier watches to the company's top salespeople. Yes, such things aren't cheap, but Miller is convinced it's one of the keys to success.
And perhaps more importantly, Sit 'n Sleep has virtually no turnover. And the few who do leave generally take jobs in a different industry, rather than going to work for a competing sleep shop.
"I really believe people need to know how much they are appreciated," he said. "We want to make them feel like they are a part of the company. And besides, you need to do it because it's the right thing to do. Without these people, we don't have a business."
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