The Truth Behind The Steinhoff Purchase Of Sherwood

Over the last 6 months, it has been a fun game of speculation, hasn’t it? Who is Steinhoff going to buy next? Will Serta/Simmons Bedding end up selling to them due to their new deal with Mattress Firm? Will there be a hostile takeover of Tempur-Sealy after the announcement of the divorce with Mattress Firm and the stock nosedive afterward?  Now we know that Steinhoff picked Sherwood as their manufacturing partner to move forward with. They could have chosen anyone; so why them?

If you know anything about Steinhoff, it was not a surprise to you that they would move backward in the supply chain, especially given the fact that they own the largest distribution platform in the United States. If it were you, wouldn’t you want to benefit from both manufacturing and retail? There are a lot of rumors out there about this topic from people who say they know but actually don’t, so let me clear a few things up. Steinhoff is buying Sherwood because they see a good business run by a very capable management team. If this weren’t true, they would never invest in the company. (I have been closely involved helping Steinhoff look at other deals in the United States over the last several years so I know what they look for.) To the Steinhoff guys, this is just another strategic acquisition. Markus Jooste and team are going to want Lance and Neil Ellman to run a profitable business and grow it in a significant way. It is true that the Mattress Firm is also a Steinhoff company but not much has changed for the Ellman’s. Mattress Firm was their biggest customer before being added to the Steinhoff family, and Mattress Firm is still their biggest customer. The one difference is that Jooste is going to EXPECT Lance and Neil to grow sales and profits in the United States with ALL of their customers and Steinhoff understands that in order to do that, there has to be a wall between the two companies. Don’t believe me? Look at the other countries where they have done this successfully. They know what they have to do to make this work.

People have been asking me if Sherwood is going to continue being the contract manufacturer of Spink and Edgar products in the United States. I have to be honest, when this all started my brother Jeff and I weren’t sure. But after thinking through this logically, the answer was easy. We are staying with Sherwood for the same reasons Steinhoff purchased them. They are incredibly efficient low-cost producers with state of the art factories, making very high-quality products. They have a stellar team in place to run the business, and things can only get better when you consider that they will now have access to the Steinhoff innovation pipeline and raw material purchasing power. But the biggest reason we are staying with Sherwood is the Ellman brothers. Neil and Lance are like extended family to us and they are our business partner in this venture and we don’t want that to change. We all see the upside for Spink and Edgar given the great success of our retailers and we want to see it grow. At the end of the day, we have to make the decision that will best serve our customers and we have definitely done that. I am happy to report that our customers unanimously agree.

For you retailers out there getting an ear full from other producers that want to hinder what Sherwood is doing in their unique ability to offer value and high-quality products across all price points, I want you to consider this.  You need to do what is right for your business. If Sherwood products are compelling to you and can help you make money, you should make them or keep them as your partner. If you want something that doesn’t feel like anything else on the market, that is proven at a best selling price point of $5,000 in queen, and is all natural and built for the luxury consumer, then consider Spink and Edgar. Everything else is noise.

We now live in an industry where Serta/Simmons Bedding has committed MILLIONS, (over $100 million to get a little closer to the number), and delivered an exclusive program to drive Mattress Firm’s business; likely to the detriment of their other retail partners. You have Tempur-Sealy out there promising to open more of their own retail stores, and expand their direct to consumer program. Where will all of these paths lead? Stay tuned.

 

11 Comments

Is Your Website Making You Money?

A guy walks up to you and he is wearing clothes that look like they have been balled up in the corner of his room. Shirt is wrinkled, two sizes too small to where his belly is hanging out, cigarette burns right in the middle, pants too short that show off his two different colored socks, and to top it all off, he is wearing a pair of shoes that look as if he has walked 1,000 miles in the mud. What kind of impression do you have of this person?

Now, shift gears with me here. What does your website look like? Does it fully represent who you are as a company? Is your philosophy clearly communicated to your audience? Is your copy written in a way that is not only engaging but easy to understand ? Do you build value in your products in a way that separates you from all of your competition? (Visit their site and see what they are doing.)

The real question is…“IS YOUR WEBSITE MAKING YOU MONEY?

Your website is an extension of your company brand, and for many consumers out there, it is their FIRST impression of who you really are.  (All you B2B guys, this goes for you as well.) I have read that up to 85% of the people out there begin their shopping process online so if that is the case, are you placing the proper amount of focus on that part of your business?

 

Websites don’t have to just look and feel good to the visitor they actually have to perform.

  • Do you have information that will keep your visitors on site for more than a few minutes?
  • Is your site easy to navigate? Can you get to relevant information in just a click or two or is your bounce rate high leaving your customers wanting more?
  • Are you easy for people to interface with on a mobile device? (A lot of traffic comes in this way so do not ignore or underestimate the importance of this one!)
  • Are you optimized for search so that the people looking for the products you sell can find you in organic ways? Do you have backlinks built to your site from other sites with good authority?
  • Do you have the right design that will convert the visitor into action which will lead to a sale?

If this stuff is intimidating to you, your not alone believe me. But the fact of the matter is, you don’t really have a choice anymore. If your website isn’t driving interest and business to your company then you need to get it fixed. If you want some help on that I will offer you a name of someone that I trust and have done business with for years. He is a great guy and created spinkandedgarusa.com for us (which our customers tell me is the best luxury bedding site online).  His name is Carlos Arnavat and you can contact him if you have the need. 314-549-5052 or email at c4@studioc5.com. He works with mattress wholesale and retail companies already so you will not have to teach him the industry.  If you tell him you are a Q’s Views reader he will take extra good care of you with a free consultation on your site. 🙂

Don’t be that guy wearing the bad clothes. Dress like your going to meet the Pope, check yourself out in the mirror (let Carlos evaluate where you are), and get ready for some awesome things to happen. If you don’t wow me online, there is no reason for me to work with you so it’s gut check time! Is your site working? How do you know?

 

It’s Not Gone Until It Is

My 14-year-old daughter Gabby just had surgery to repair a labral hip tear as a result of a sports injury. We had six months of trying to diagnose the problem, one failed surgery due to an allergy to a drug, and finally a successful surgery this week.

My Gabby girl. Please don’t tell her I posted this picture, she will kick my butt.

She has missed her volleyball season, basketball season and now her softball season, sitting the bench cheering on her team. For a 14 year old that isn’t so easy to do. She is entitled to be sad about this, I know I would have been, HOWEVER, you have to stop it at some point and say….you weren’t diagnosed with a disease. Right?

My point today is to say that I take things for granted. The health of my family is the most recent add to that list. How many of us wake up and say, thank you God for letting me go to the bathroom without using a walker. Thank you for allowing me to see well enough to drive my car to work. Thank you for the fact that I am not taking medications to deal with depression. Sometimes we don’t appreciate something until we don’t have it anymore and that should stop.

Take a minute each day and be grateful for the things that you just expect to have.

Big THANK YOU to Dr. Chris Shaw and his rockstar staff. They did an amazing job with Gabby and caring for our entire family during the process. Today, they move on to another patient and I’m not really sure if they understand the impact they have on the people they help, so hopefully, this note lands with them.

I used to live at the base of Snowbird in Salt Lake City and I remember sitting at stop lights just looking around in awe of the scenery. Then I noticed that I was the only one doing it. When you have something great you tend to forget how great it is until maybe it’s not there. Look around today and take notice.

A special thanks to our good friend Dr. Derek Miller in Joplin for sticking by us through the entire process. You are incredible.

5 Comments

Professor Perry Goes Bigger And Better!

My friend David Perry did it again by putting on a record-breaking Funiture Today Bedding Conference that hosted more people than ever before. Not only is Dave one of the hardest working journalist in the industry, he is a cash machine for the Furniture Today ownership team. I hope he has a corner office in that building.

Read to the bottom today for my favorite part of this event; you will love it.

This year was no different than past years, some of the sessions were great, some were not as great, but the real value is always delivered by what you learn from old friends and new friends over cocktails and at dinner. Here are a few things I took away from my time in Florida:

  • The store is the brand. I happen to agree in most cases unless you are Tempur-Pedic who has earned a different kind of respect from the consumer.
  • Joe Alexander with Nest Bedding is one of my new industry heroes. He has great swag and has accomplished a lot with his company. If you want it go take it, and deliver value to others along the way. So simple. So true.
  • Imported mattress are now accounting for about 20% of the industries finished mattresses in the United States. I only heard that a few times but WOW?! More on that subject in a future blog.
  • Equalman or Eric Qualman his alter ego is still bringing his “A” game. I had lunch with Eric several years ago and was impressed with his approach to digital. He was the key note to kick off the conference this year and didn’t disappoint.  Bottom line; Social media isn’t a choice. The only choice you have is how well you do it and if you think there is no ROI to social at this point, you might be past the point of help. Get Socialnomics or watch THIS VIDEO and learn your way in.
  • Bed in the box is here to stay, the only question is how big will it get? Brick and mortar has some serious advantages, but to underestimate this channel would be a mistake.

As always, the Retail Bedding Giant presentation dinner was a lot of fun. This year they honored Levin Furniture, Mattress Direct, and The Mattress Hub. I really enjoy hearing stories about how people built their business, and why they got into the mattress business. Each one of these guys has done an incredible job representing this industry so to all of them I say well done and congratulations! I had a brief moment to speak to Joe Fleckenstein with Levin Furniture so Joe if your reading this, two things. 1. Your humility inspires me. 2. Damn your tall. 🙂

Honoring Ed…Karl Glassman, Larry McKay, Ed Lilly, Kevin Toman, Mark Quinn

The final award of the night was delivered to one of my mentors and the past CEO of Serta Inc., Ed Lilly. I worked for Ed over 15 years ago. He brought me in at the age of 28 to be the VP of National accounts managing Montgomery Wards and Sam’s Club which accounted for about 30% of the companies volume at the time. I’m not really sure what he saw in me to trust me with that but to say that I am grateful to him and Jeff VanTuyle would be an understatement. Unless you were there, you can’t appreciate what Ed really accomplished for Serta and for the industry but I can tell you this…he was what every leader should aspire to be. He had something like 15 different maverick owners of Serta Licensees all wanting to go their different direction and somehow, he brought them together, drove the heck out of the business, created a national brand, and placed his people at the top of his priority list.  Ed and Nancy, I love you guys and I appreciate what you did for me more than I can express. Sitting at your table and sharing the night with you was an honor.

BUT THE BEST PART WAS…

Can’t show you pictures of the kids for legal reasons but here is our awesome group.

At the end of the first day they had a team building session sponsored by E.S. Kluft. I have to admit, like many others, I really wanted to skip this as I have done a lot of “team building” crap in my career and my e-mail was screaming my name. But I went because Nelson Bercier with Sit’N Sleep convinced me it was going to be worthwhile because Howard Galant promised him it would be. Howard and I have been friends for as long as I have been in this industry so that was good enough for me. You were put into one of 15 groups and were instructed to build the bicycle sitting in the middle of your circle. After we built these bikes the team leader of the exercise drew some parallels of this exercise to our typical work life which was expected, but then the doors to the room swung open and in marched 15 children. These kids were extremely poor and not one of them had their own bike. We were told that a few of the families even lived in their cars. The look on their faces and the hugs from the kids did us all a lot of good. My thanks to Howard and to David Binke the CEO of E.S. Kluft; another class act. These guys did a great thing. Not only did these kids get a bike, but David handed the school principal a nice check to help the kids that didn’t get to come. Well done guys.

 

Boring Is Bad

Want some truth today? Your products really aren’t that interesting. Don’t get me wrong, there are people that like them and want to buy them of course or you wouldn’t be in business, HOWEVER, they aren’t as cool as you think they are.

I was reading a blog post by Seth Godin and it got me to thinking. The fact of the matter is that we are all significantly more interested in what we do and what we sell than anyone else. Hopefully, we have passion for our work but we can’t overplay that and bore our audience with a bunch of boundless bull.

Years ago we were interviewing a PR firm that told us about one of their favorite case studies. The company that hired them wanted to be thought leaders in their industry, which doesn’t sound too daunting until you learn that the company you are representing makes bolts. Seriously, how sexy can you make a bolt? The PR firm discovered that the bolts this company made were used in the renovation of the Statue Of Liberty. Problem solved.

My challenge to you today is to read the copy on your website or in your marketing materials. How long does it take until you are daydreaming about what you’re going to have for lunch? No excuses either people. I don’t care what industry you’re in or what product you sell, you DO NOT have to be boring. Boring is a waste of time and lacks empathy.

Show some respect to your audience, search for the “Statue Of Liberty” story in your own world and drive it home. Be brief, be strong, be relevant. Are you thinking about lunch yet?