Steinhafels' Evans purchase moves it into bed making
By Clint Engel -- Furniture Today, February 10, 2008
Waukesha. Wis. — Top 100 company Steinhafels is entering the factory-direct bedding business with its acquisition of Evans Mattress and Furniture.
The move gives the six-store, midpriced Steinhafels room to grow its bedding business with a fresh line at starting price points and new appeal toward consumers drawn to the value story of factory-direct product, said President Gary Steinhafel.
The purchase price was not disclosed.
Evans, which has been manufacturing mattresses for 60 years and makes Steinhafels' private-label line, will continue to be led by Jeff Tennyson and his sister Kristin Finco, third-generation owners of the business prior to the deal. Steinhafels is moving the production equipment to its old warehouse in the Milwaukee suburb of New Berlin, Wis.
A new line at starting price points — $299 to $699 for a queen set — should be ready for the retailer's stores in about 60 days, Steinhafel said.
"We've been growing our mattress business over the past 15 years and do really well with Sealy, Simmons, Tempur-Pedic and most recently ComforPedic (owned by Simmons)," Steinhafel said. "They've all been great partners."
Steinhafel said the company sees "this as nothing more than an opportunity to attract more promotional customers into our store and hopefully expose those folks to the benefits of branded mattresses and specialty sleep options."
But at the same time, the retailer expects to expand its promotional, private-label business to 10% to 20% of its bedding sales, from less than 5% today, he added.
Six-store Steinhafels does about $30 million in annual bedding sales, accounting just over 20% of its total sales, Steinhafel said. "We see this as being an expansion of the pie."
He said his sister, Ellen Steinhafel-Lappe, the company's chief financial officer, had the idea to enter the factory-direct mattress market. She "saw this not just as an opportunity to expand our business, but to do so in a way that would allow us to stamp the product with our standards of excellence that customers have come to trust."
Steinhafel said the purchase gives the company "a long-term opportunity to consider opening free-standing bedding stores, but at this point, we have no immediate plans to do so."
Selling to other retailers also may be in the cards down the road, he said, but the first goal is to design the line to meet Steinhafels' "high standards of both quality and value.
"Once we're confident the products are right, we would consider a strategic alliance with other non-competing area retailers," he said.
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