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Is Serta/Simmons In A Death Spiral?

First of all, I would like to say that there are a LOT OF GREAT PEOPLE working at Serta/Simmons Bed (SSB), so if you’re not the ones making the decisions that have brought things to where they are today, then this is NO reflection on you. Keep working hard, that’s all you can do.

So what are the facts and perceptions out there around SSB? I’ve had many discussions with large retailers and other industry insiders about this topic so I thought I would share some of those insights plus a few of my own.

  • Furniture Today announced that SSB was cutting more than 160 employees as part of a corporate restructuring that says it will better position the company for long-term success. Really? They want to be a “lean, more nimble consumer-focused organization which is even easier to do business with.” So how does that work? Does this really mean that they are right-sizing to get more aggressive with their direct to consumer business?  They want to be more consumer-focused, how about customer-focused meaning their retail base?
  • There have been many complaints about the service level already coming out of the SSB factories so how is this cost-cutting exercise going to help that get any better?
  • In the press release, they say, “We are proud of our leadership position and look forward to continuing to create great sleep and shopping experiences for consumers.” Based on the conversations I’ve been having, there aren’t too many that consider SSB to be leading anything. Just because you are big, doesn’t make you a leader.
  • The product launch for SSB in Vegas was not received well. Not the right time to hit a single if you’re them.

I’m not entirely sure how things got to where they are, but I am pretty confident about the fact that when companies try to “cost cut” their way to success, it rarely ends up the way they want it to. For the retailers out there that have been suffering from lackluster product and service, I think it’s a hard sell to convince them that any of this is in their best interest.

What do you think, can they pull out of it?

Mark Kinsley and I talk about this in a podcast we will publish next week available at dosmarcospodcast.com or you can watch the live video of that below.

For the record, we look better on the podcast.

 

4 thoughts on “Is Serta/Simmons In A Death Spiral?

  1. It’s amazing what Tempur Pedic did to the S brands. Then bought Sealy lol. Anyways,they need a better mouse trap or make a cheaper line and grab some of those billons on the low end side. Personally, I would do both. But that’s just 30 years in the business talking. 🙂

    1. You make some good points Larry. A lot of producers and retailers have moved away from being the best solution at the velocity price points which is a mistake if you ask me. I actually talk about this in my blog that will post next week so check it out. Thanks for reading!

  2. Mark – I think your description of Death Spiral is correct. I am Ex Simmons/SSB Employee having worked for Simmons for over 10 years having left to take another role outside the industry (as I saw the impact of the new leadership). Sales have declined significantly over the last 18 months ultimately as a result of poor leadership. Obviously, the industry is being disrupted but had the right leadership been in place this could have been taken as an opportunity rather than seen as an excuse. While it is always good to bring in new ideas through people in other industries, Traub has systematically eliminated experienced bedding leaders to a point now that the company is being led by folks who are no doubt smart but don’t understand its customers. Private equity ownership can also be a factor with having a short term view but I would say that Advent have invested in many ways to support leadership but they have been let down. Of course they now need to take responsibility for their decisions with leadership selection. I can tell you that the remaining key experienced leaders are feverishly looking for jobs outside the company. It is truly sad to see the impact that a short term set of leaders chasing the private equity payout have had on the folks who have loyally supported the brands. All of this provides the opportunity for competition and rightly so. Leadership can never be underestimated and SSB is crying out for some.

    1. The facts are what they are as it relates to what has happened to that company Zalmon. It is tough to see a company like SSB that was riding high with so many opportunities in front of them, end up where they are today. If their customers and their people were the top priority, they would be in a much better place or at least that is my opinion. Thanks for reading and best of luck to you in your new career!

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