Tempur Sealy and Mattress Firm Get A Divorce

I could have gone with a different headline like the press release from Tempur Sealy this morning saying that there was a “Termination Of  The Mattress Firm Contract” but I think this relationship was more like a marriage. Aren’t most great business relationships?

When something like this happens, everybody gets hurt; especially the kids or in this case the employees. According to recent reports, Mattress Firm accounts for 25% of Tempur Sealy’s business wich equates to about $750 million. They are a public company so you know that their stock is going to take a big dive today and people will likely lose their jobs as a result. Tempur Sealy is not going to be able to replace that kind of volume for a long time and when you stir this in with the e-commerce guys out there pushing hard on the memory foam category, they will have their hands full in 2017.

If you consider this from the Mattress Firm perspective,  you have an army of retail sales associates that were incredibly loyal to the Tempur Sealy brands, especially Tempur-Pedic. Mattress Firm leaned into Tempur-Pedic in a HUGE way when it came to advertising dollars and their people were RAVING fans; maybe even to a fault. Most product presentations would begin and end with a Tempur-Pedic bed because Tempur had earned that attention with their marketing program. Let’s face it, Tempur-Pedic made their products easy to sell. Most of the retail sales force is going to wake up today trying to figure out how they are going to replace their income that came from sales at and above $2,500 in queen. There are not many products out there that can deliver those kinds of big ticket register rings.

No matter how you spin this it is a classic case of LOSE/LOSE. There will be a lot of speculation as to who’s fault it was, which side lost the deal,  and which person caused the problem in each organization. The blame game stinks and is rarely productive and when you boil it all down, the outcome here is bad for just about everyone. At least in the short term.

So what’s next, is marriage counseling a possibility? Doubtfull. These companies are hard at work today creating a new strategy. Looking for a way to minimize the bad and find opportunity in the chaos. Now is the time to look forward and prove out the thinking that brought them to this place. I am a firm believer that they are where they are supposed to be and everybody will figure it out.

I would encourage the rest of us watching this unfold to reserve judgment on what has transpired because unless we were at the table, I seriously doubt we would understand how it could have been avoided. Having said that, I am certain there will be a lot of Monday morning quarterbacks today. I hope the best for the PEOPLE at both companies and for good things to come out of it where possible. Helluva start to 2017 wouldn’t you say?

 

About Q

Mark Quinn is a 20-year mattress industry veteran with a passion for presenting business in the best possible light. He works hard on strategy and culture, and has a business focus on leadership and marketing. Quinn believes every company is a media company and works hard in the digital space to bring products and stories to the right audience. Family comes first, and FAITH is a verb.
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5 Responses to Tempur Sealy and Mattress Firm Get A Divorce

  1. Pete Primeau says:

    Mark,
    Well said! I am starting my 35 year in this industry and I hope and pray that the moves that are playing out don’t result in lots of lost jobs. Let us all hope for the best for all parties involved.

  2. Mark says:

    Darrell, you make some good points about the price-value equation. Consumers are in the driver’s seat and the industry needs to prove the value in all its products. Do you mind clarifying the statement: “roll packable non-tempered pocketed coil units coming from China subsidizing Leggett in many instances.” I am confused about the part that says “subsidizing Leggett.” Thank you.

    • Mark says:

      Darrell, that information—all of it—is incorrect. You’re invited to visit me in Carthage, Missouri and experience the truth. I mean it. Leaders shouldn’t play fast-and-loose with the facts. You should make the trip.

      Here are the facts:

      All mattress manufactures who are customers of Leggett & Platt, and located in the United States of America, receive innersprings from one of our five domestic facilities located in Carthage, Missouri, Ennis, Texas, Winchester, Kentucky, Monroe, Georgia, or High Point, North Carolina. We do not import innersprings from China and for years have been fighting the Chinese’s nefarious dumping practices. Our efforts are well-documented.

      As you may know, Leggett & Platt has manufacturing operations all over the world and those facilities serve local markets. We do not, under any circumstances, import innersprings from China. What you’re seeing on Alibaba is misinformation, for which the Chinese are notorious. Also, I’m not sure what you mean by an 18” unit—it’s unclear what you’re describing. Open coil units do indeed require the safety offered by an unbaling machine, but fabric-encased coil units can be unrolled by hand on the factory floor and, due to electronic tempering, regain their original height and maintain firmness. We have mountains of firmness-loss testing data proving what I’m reporting. I’m happy to send that information your way. Also, visit BeddingComponents.com.

      As mentioned, this is an open invitation to visit any of our five domestic innerspring manufacturing facilities and meet some of our 9,000+ American employee partners. There you’ll see the logistics behind how we use domestic manufacturing to supply all of our USA customers with the world’s best innersprings and bedding components. As a retail leader, I think seeing the truth first-hand would be time well-spent.

      Most educators, such as you, also like to expand their knowledge base and correct misinformation, so I trust you enjoyed learning the facts about Leggett & Platt.

  3. Todd Councilman says:

    Great read Mark. I share your perspective. I think this could be good for other vendors if they have the proper product placement. The unrealized impact to valued employees at both companies will be fealt soon and that is very sad.

  4. Stuart Carlitz says:

    This is a lose lose situation. There is certainly more to this story that will come to light in the upcoming months. Tempur Sealy sales can not be easily turned to alternative vendors. Additionally, advertising dollars spent by MF will not bring about the same return without these key brands present. This is a classic case of personalities getting in the way of good business principles.

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