Research Question: Will Tempur-Pedic’s lower-priced mattress lines help turn company sales around?
Companies: Tempur-Pedic (TPX), Sealy (ZZ), Serta
Initial research by Blueshift indicates growing competition for TPX, while the company introduces new premium offerings, evaluates its prices, and expands visibility of its lower-priced mattresses, led by its Simplicity line.
- Blueshift’s June report revealed that TPX’s Simplicity line would allow the brand to expand its customer base without cannibalizing its higher-priced mattresses. Our report did find challenges ahead for TPX including an increase in quality products from competitors, a lack of products in the growing trend of eco-friendly mattresses, higher material prices, and retailer dissatisfaction with the company.
- According to TPX, its new Simplicity line hasn’t been the blockbuster it expected, but the company remains committed to the line with retail inventory expansion. Also troubling for the company and contributing to its 8% decline in U.S. mattress sales in Q2, TPX experienced increased competition, particularly in the premium product category, which resulted in potential customers buying competitor products.
- To combat increasing competition and boost sales of its U.S. mattresses, TPX recently introduced its new TEMPUR-Weightless Collection of premium mattresses and pillows, introduced two new mattresses featuring TEMPUR-Breeze Cooling which provides for a cooler sleep, and opened its premiere flagship retail store in the greater Boston area. Additionally, the company noted on its 2Q earnings call that it would be conducting a comprehensive review of its consumer and wholesale prices to ensure competitive pricing.
To confirm or deny sales concerns for TPX and to gauge the mattress industry as a whole, Blueshift will gather data from sources in the following silos: customers, retail locations, suppliers, and industry specialists.