Innovation puts Serta on hot streak

Sales up more than 10% through July

David Perry -- Furniture Today, August 26, 2008

HOFFMAN ESTATES, Ill. - Those famous Counting Sheep, bedeviled by comfortable Serta mattresses, now have cause to smile: They have helped turn Serta into bedding's fastest-growing producer.

While sales for its major competitors are slumping, Serta is riding a hot streak. Sales were up more than 20% in July, helping push Serta to a 10% sales increase for the first seven months of the year, according to Bob Sherman, president. That's a stunning performance at a time when the industry is mired in a downturn.

Serta’s Bob Sherman sits on a new Vera Wang specialty sleep set.

 

What's working for Serta? Just about everything. Its partnership with Vera Wang is thriving - and helped land Serta on Donald Trump's "Celebrity Apprentice" show, giving Serta a major shot of notoriety.

Another moment in the spotlight came at the recent Las Vegas Market, where Serta stepped up to the plate in a major way, cosponsoring the Rod Stewart concert that kicked off the opening of the World Market Center's new Building C. Sherman took to the stage just before Stewart, thanking Serta dealers and making a pitch to non-Serta retailers to get on the bandwagon.

That bandwagon has been picking up speed. Serta has increased its involvement with buying groups, adding significant distribution in that channel, and also has added a number of major bedding retailers.

Serta consultant Hershel Alpert, former president of Alpert's Furniture in Seekonk, Mass., has been a key to the retail expansion. "Having Hershel as a consultant has opened up so many doors," Sherman said. "He has introduced us to so many key retailers in the U.S."

Added Alpert: "None of this would be happening if Bob wasn't someone who keeps his word and builds good products." Alpert and Sherman have been hitting the road together, calling on key prospects.

Sherman said a key to Serta's success is that it is giving retailers products they want. While Serta's competitors are implementing lean manufacturing models, cutting SKUs and vacating price points, Serta is taking the opposite approach, Sherman said. It has retooled its factories to produce "unique and different products" that enable retailers "to make the margins they want," he said.

Serta is "concentrating on producing a smorgasbord of products at all price points," Sherman said. "Retailers can pick from the buffet line, and pay at the end."

With 24 U.S. factories, Serta is looking to add two more plants, according to Sherman, who says the factory network positions the company to meet the needs of dealers across the country. "We are better situated to serve our dealers than anyone else," he said.

The producer also is aiming to stand out with distinctive products and materials. It is aggressively looking outside the bedding industry for new components, and also challenging suppliers inside the industry to come up with fresh new products, Sherman said.

Meanwhile, the well-known Counting Sheep campaign continues to pay dividends, creating broad awareness of the brand. "The power of our brand has rolled up to be a huge strength," Sherman said. "Our investment in our brand is really paying off with retailers."

"Serta's business is built by growing its customers' business," Alpert added. "That defines who they are."

This year Serta has added "hundreds of dealers, and some are very large accounts," Sherman said.

The producer used the recent Las Vegas Market to introduce new Vera Wang specialty mattresses, building on a line first launched last year. "The Vera Wang by Serta brand has great momentum and our specialty collection has been very successful," said Maria Balistreri, vice president of brand management for the Vera Wang line.

The new specialty beds feature Beyond Comfort foam, a Serta-exclusive temperature regulating latex foam that maintains a consistent body temperature throughout the night, according to the producer. The models also feature organic cotton covers enhanced with aloe vera, "which is known to have a significant effect on energy levels," Serta said.

Sherman said Serta is working hard to maintain its edge in the marketplace.

"Everyone realizes we have momentum," he said. "We want to continue it. It is fun."