Stellenbosch, South Africa – Steinhoff International saw a 5.9% fall in like for like sales at its Mattress Firm brand in the US after it broke of a supply deal with Tempur-Sealy.
The numbers can be found in Steinhoff’s 2017 half yearly report. This said it its US Mattress Firm business had revenue of $1.5bn and made an operating profit of $69m, a margin of 4.5% in the six-month period.
Steinhoff said it had been selling off stock of Tempur-Sealy products from its stores. Tempur-Sealy issued a trading update in June after the business relationship ended.
Steinhoff said that replacing Tempur Sealy products ‘with new innovative merchandise from other leading brands, largely Serta Simmons, the largest mattress manufacturer in the US, will enhance Mattress Firm’s customer offering an attract a wider customer base focused on value and innovative new products.’
Markus Jooste, Steinhoff ceo said that Serta-Simmons is an existing supplier of the Steinhoff group and that the ‘exclusivity deal with Serta Simmons will stimulate our revenue and trading density over the medium term. Our previously communicated 12-month guidance of $3.8bn revenue and EBIDA margin of approximately 9% remains.’
Steinhoff said that it and Serta-Simmons were investing $100m in advertising over the next 18 months.
The firm added that it had decided to buy a majority stake in Sherwood Bedding, which supplies private label brands to Mattress Firm. Private label brands account for around 15% of Mattress Firm’s revenue, Steinhoff said.
Steinhoff has also reached an agreement with Purple Bed, a ‘pure online mattress retailer,’ to gain further access to the bed-in-a-box market.