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Dealers Waking Up To Bedding

4/09/2012 12:01:00 AM Eastern

NEW YORK — Mattresses have proven to be a lucrative
adjunct to many CE and appliance dealers’ core assortments.

Rick Bellows, group president and chief appliance
merchant of the Mega Group USA buying organization,
lauded bedding as “a great category and an easy business
to get into.”

“Every dealer we put it in has been successful,” he said,
and following a period of market oversaturation, mattresses
are now outpacing all other Mega sectors in growth.

Mike Allen, home furnishings executive VP for the Brand-
Source buying group, agreed that the bedding business
is on fire. “There’s more mattress business being done
now than in any time in history,” he recently told members,
and noted that the group’s turnkey Sleep Source mattress
program “is what’s keeping the doors open for some appliance
dealers.”

Mattresses weren’t a critical addition for Tracy’s Appliances
in Lima, Ohio, but second-generation principal
Jeff Tracy said they certainly haven’t hurt. The 62-year-old
company recently entered the category through Sleep
Source, he told TWICE, and Tracy is so enthused with its
initial success and the ease of entry that he’s considering adding recliners.

At regional majap and CE chain
Conn’s, furniture and mattresses have
been such a boon to gross margin
and revenue growth that the company
is expanding its assortment, launching
a container-sized direct-sourcing program,
and is remodeling its stores to
give the categories more floor space
and better displays. Conn’s partly attributes
its recent financial rebound to
those home lines, and foresees furniture
and mattresses eventually comprising
as much as half of all product sales and
floor space.

Furniture and mattresses are also becoming
central to the Nationwide Marketing
Group, which added bedding and
motion furniture to its mix and featured
more than 100 bedding displays at its
PrimeTime! buying show in February.

“We need more stores to get into
these categories due to margin degradation
in CE and appliances,” commented
CEO Robert Weisner. “No one
wants to run a store with a very small
profit, and for some [mattresses are] the
Holy Grail — 30 percent margin.”

Richard Weinberg, Nationwide’s appliance
merchandising senior VP, noted
that “bedding profits can defer expenses”
as dealers add new programs that
attract new customers and generate additional
sales which can fuel other new
profit opportunities.

Nationwide CE marketing VP Doug
Schatz added that members can also
bundle motion furniture into “lifestyle”
packages with gaming systems, large
flat-screen TVs and speakers “to make
the total margin a little tasty.”

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