Dealers Waking Up To Bedding

By Alan Wolf and Steve Smith On Apr 9 2012 - 4:01am




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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