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Serta stays on fast pace

First-half sales up 15% for No. 2 source

David Perry -- Furniture Today, August 25, 2010

HOFFMAN ESTATES, Ill. - The Counting Sheep are back and they are helping Serta stand out from the bedding flock.
     Serta has moved into the No. 2 position in U.S. bedding sales, unseating Simmons from a prestigious perch it had occupied for decades.
     Serta President Bob Sherman emulates Donald Trump’s pose in a display in Serta’s Las Vegas Market showroom.Now it is setting its sights on No. 1 Sealy and is making a strong bid to unseat that producer as well.
     Through the first six months of the year, Serta sales are up 15%, according to company President Bob Sherman, the bedding veteran who has put Serta on a fast-growth course. That increase indicates that Serta continues to gain market share; the International Sleep Products Assn. says its sample of 20 leading producers is reporting a 10.7% shipments gain in the first six months.
     "If the industry is up 10%, for us to be up 15% is where we want to be," Sherman said.
     He offers several reasons for Serta's strong performance in recent years, one that has seen it steadily close in on Sealy. Last year, Serta was just $62 million behind Sealybrand shipments.
     "First and foremost," Sherman said, "we are trying to help retailers grow their business. We are the manufacturer that grows market share."
      Serta has pursued an aggressive product strategy that has included the launch of several licensed lines, a departure from other top bedding producers. Serta has licensing deals with Donald Trump, Vera Wang, HGTV and even Southern cooking guru Paula Deen. Serta officials say those programs enable the company to offer exclusive product lines to its retailers, something that many dealers want.
     "Retailers are searching for higher-margin products and for innovation," Sherman said. "They also want to separate themselves from other retailers. Licensing has provided answers to all of those needs."
     Those deals have given Serta a high profile. The Vera Wang line was featured on Donald Trump's "Celebrity Apprentice" show a while back, and Trump himself has now jumped on the Serta bandwagon.
      In a new series of advertising spots, Trump makes his first appearance with the famous Serta Counting Sheep. Trump and the sheep are teaming up to drive traffic for the upcoming Labor Day weekend, a key bedding sales event. "That Trump commercial is huge," Sherman observed. He said consumers are intrigued by Trump.
      A Trump Home Luxury Suites sleep set retailing for $799 will key the Labor Day promotion. That model has the value of a sleep set retailing for hundreds of dollars more, according to Sherman.
     "We are big believers in marketing," he said. "This national event helps separate us from the competition. No one else is creating events like we are."
      Serta is hoping its dealers will achieve 15% to 20% sales gains during the Labor Day promotion, he said.
      Also contributing to Serta's growth is the producer's desire to do things differently from its competition. "We think outside the box more than anyone in the industry," Sherman said. "We have created a group of people very plugged into how we think."
     Serta has strong inne0rspring lines, but also offers several specialty lines, including bedding that features honeycomb gel layers. "Our specialty business is way up," Sherman noted.
     He believes the industry will face a tougher sales climate in the second half of the year. The industry's double-digit sales growth will slow, he believes, leaving the industry up 5% to 7% for the year.
     "I still believe this will be a slow recovery," Sherman said. "We are up against higher numbers (in the coming months), and I remain concerned about unemployment and the real estate markets."
     But Serta isn't resting on its laurels. At the recent Las Vegas Market, the producer unveiled a line of bed-in-a-box models in its Nickelodeon program, one that Sherman described as a major success already.
     It also introduced a new private label line for National Home Furnishings Assn. members, retailing from $299 to $1,099, another sign of its willingness to give dealers exclusive product lines.
     Those Counting Sheep are eating all the grass in their sight.

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Serta stays on fast growth pace

Aug 23, 2010

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