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David Perry

Looking to grow? Enter

Let’s assume, for the moment, that you are running an expansion-oriented furniture retailer. You are looking for a category to boost your margins and to give your sales a shot of adrenaline. You also want to increase your turns.

What do you do? Easy. You open some bedding specialty stores, thus joining an elite group of retailers that is outperforming the industry as a whole.

That is one lesson that emerges from a close look at Furniture/Today’s survey of the Top 100 U.S. Furniture Stores (order electronic version). Our latest installment of that report, included as a special section in our May 29 issue, provides fascinating insights into the furniture and bedding specialty scene.

The 11 bedding specialty retailers ranked on the Top 100 list together posted a 15.8% sales gain in 2005, according to our report. That is almost twice the growth rate recorded by the Top 100 as a group (8.3%), and almost four times the growth rate for all U.S. furniture stores (4.1%).

Those 11 bedding specialists together boosted their net store count by 108 units last year, a 5% increase. Growth was a universal theme of that group; not a single one of the 11 posted a sales decline last year.
Looking for some bedding standouts?

* Select Comfort (No. 12 overall) led the growth parade last year with a sizzling 21.7% sales increase. With average sales per square foot of $1,264, Select Comfort trailed only Gallery Furniture in that category. Select Comfort’s average stock turns last year of 23 trailed only the 28 of Gallery. And Select Comfort had the highest gross margin, a scintillating 59.4% average, on the Top 100 list.

* 1-800-Mattress tied for third on the average gross margin list (50%), and was fourth in stock turns, with 16.

* Sleepy’s and Sleep Country USA almost matched the overall growth rate achieved by Select Comfort last year. Sleepy’s, No. 21 overall, grew 21.2%, while Sleep Country USA, No. 82 overall, grew 21%.

* Other bedding retail standouts last year included Mattress Firm, with sales up 19.9%, and The Sleep Train, up 17.2%.

Now don’t think that those success stories are an indication that bedding specialty retailing is a can’t-miss venture. In a few cases, major bedding specialists lagged the overall market. And some didn’t hit their own growth goals.

Entrepreneurs opening bedding specialty stores will probably face plenty of competition. But they will find bedding producers excited to partner with them, and a growing overall market for bedding. They will also find superior margins, if they run their businesses wisely.

While there are risks in entering the bedding specialty arena, the rewards are clearly inviting. We think more retailers will enter the arena this year. And we wish them well.