• David Perry

Analyst: Private label will grow at Mattress Firm

ATLANTA – House brands will play a much larger role at Mattress Firm in the future, an analyst writes in a one-year retrospective on the retailer’s acquisition by Steinhoff.

Keith Hughes, who follows Mattress Firm and other home furnishings companies for SunTrust Robinson Humphrey, said Steinhoff’s international model for private label business will likely be “tested” in the U.S.

“At the time of the Mattress Firm acquisition,” Hughes wrote, “Steinhoff stated their strategy was to specialize in price ranges that appealed to the mass market, with this goal being supported by their vertical integration of the supply chain, volume and purchasing power.”

He said that in Steinhoff’s recent earnings release the company “reiterated they have manufacturing capabilities for Mattress Firm house brands given their recent acquisition of a majority stake in bedding producer Sherwood, versus historically being dominated by the Tempur brand. Further, management has also described their relationship with Serta Simmons as less restrictive given their ability to produce house brands for Mattress Firm.”

Hughes said that management believes “that house brands will be much higher than the historical amount of roughly a low-single digit percentage of sales.”

In his report, Hughes also provided a chart showing the number of models offered by Mattress Firm in-store and online. It says the retailer has 36 models at under $500, 16 from $500 to $1,000, 15 from $1,000 to $2,000, and 31 at more than $2,000.

David PerryDavid Perry | Executive Editor, Furniture Today

Hi, online readers. I'm David Perry, executive editor of Furniture/Today, and the writer on the mattress beat. Get my musings on mattresses on our web site and on my Twitter feed. And let me know what you would like me to write about in the wonderful world of mattresses.

Follow me on Twitter at https://twitter.com/DT_Perry
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