Lexington, Kentucky – Tempur-Sealy has been forced to issue a trading update following a large liquidation of its products by retailer Mattress Firm in the US after their business relationship ended.
Mattress Firm accounted for around 21% of sales of Tempur-Sealy products world wide, Tempur-Sealy said in late January.
In the update's Tempur-Sealy admitted that North American orders were hit in April, and to a lesser extent in May 2017 by a large sale event of Tempur-Sealy-branded merchandise by Mattress Firm.
Tempur-Sealy said the termination of the relationship with Mattress Firm on 3 April 2017 will have "significant anticipated impact" on the company's net sales for 2017.
It could also lead to "potential uncertainty for investors relating to the company's ability to recapture a significant portion of the sales and the pace of these efforts."
The company said that orders for Tempur-Sealy the branded products in North America were up 28% in May 2017 compared to May 2016, excluding sales through Mattress Firm.
Orders at the firm’s International division in May 2017 increased by about 15% compared to May 2016, the company said. It added that in the first two months of the second quarter, International orders were consistent with the corresponding 2016 period. On a constant currency basis weakness in the UK bedding market was offset by strength in other markets. On a reported basis, however, international orders were down slightly because of the negative impact of foreign exchange rates.
Tempur-Sealy added that it did not intend to give a month by month breakdown of sales.