Tempur-Pedic's success spawns new competition
By Larry Thomas -- Furniture Today, June 12, 2006
Henderson, Nev. — A decade ago, Tempur-Pedic barely registered on bedding industry radar screens. Today, the specialty bedding powerhouse is hard to miss.
And that has proven to be both a blessing and a curse for the company's executives.
Thomas Bryant, Tempur-Pedic president and CEO, told attendees at Furniture/Today's Bedding Conference here that the success of the company's visco-elastic foam mattress has spawned numerous competing products, which is not necessarily a bad thing.
"It's good for the business in the long run," he said. "The other companies that have entered the category have given legitimacy to the technology."
Bryant said the company has to rely on the strong brand name and reputation it has built over the past 10 years to make itself stand out among the many visco-elastic mattresses now in the marketplace.
"It is often said that imitation is the sincerest form of flattery," he said. "If that's the case, then we are very flattered."
Although Tempur-Pedic got its start in the U.S. market by selling mattresses and pillows largely through direct marketing, sales from retail stores accounted for $426 million of its $536.3 million in domestic sales last year. Bryant believes the rapid retail growth will continue into the foreseeable future.
"We are trying to expand our (retail) floor space ... and extend the product line to higher price points," he said, noting the line now tops out at $5,499 in queen.
Retail Division President Chris Henning said the company's independent dealers love the line because it delivers the highest profit margins in the bedding department and is the easiest to sell.
"Consumers often come in and ask for the brand," Henning told conference attendees. "They're already pre-sold."
Plus, a mattress sale frequently generates additional revenue from sales of pillows, mattress pads and related products, he said.
Bryant said the company will continue its heavy spending on brand-building advertising — about two-thirds of which is devoted to television. The TV and print ads rely heavily on testimonials, he pointed out, because consumer satisfaction with the product is already extraordinarily high.
"I've never seen research that comes back this favorable for a consumer product," said Bryant, who held posts at Stairmaster Sports, Dunlop and Johnson & Johnson before joining Tempur-Pedic in 2001.
Worldwide, Tempur-Pedic had sales of $836.7 million in 2005. Total domestic sales, including pillows and other products, were $536.3 million.
The company has factories in Denmark and Duffield, Va. Later this year, it will open a 750,000-square-foot plant in Albuquerque, N.M.
