Select Comfort has got your number. The firm's line of Sleep Number beds, which can carry hefty price tags, use air-chamber technology to allow sleepers to adjust the firmness on each side of the mattress, providing better sleep quality and addressing sleep-related problems, such as lower back pain. Select Comfort also offers foundations, frames, pillows, and a sofa bed. A leading bedding retailer in the US, Select Comfort operates more than 400 company-owned stores. The air-bed maker also sells through a company-operated call center, its own website, and on the QVC shopping channel. Select Comfort was founded in 1987 has grown to become one of the nation's leading bed makers and retailers.
The firm operates two manufacturing plants (South Carolina and Utah), which supply beds on a just-in-time basis to its retail stores.
Sales and Marketing
Select Comfort spent $317.5 million (42% of net sales), on sales and marketing efforts in 2011, compared with about $270 million in 2010. The increase was primarily due to a 30% increase in media spending. The company advertises on television, radio, and in print, and is increasing its use of digital advertising.
After a rough patch during the deep recession and housing crisis, which decreased the demand for beds (especially expensive ones), Select Comfort's sales and profits have rebounded. Indeed, its sales jumped 22% in 2011 vs. 2010, after posting an 11% increase in the previous annual comparison. Also, net income increased 91% in 2011 vs. 2010. Still, the $743 million in sales Select Comfort rang up in 2011 is well below the more than $800 million it collected five years ago. However, with the pace of new store openings and average sales per store increasing, the company is closing in on its pre-recession high.
While Select Comfort began as a direct marketer of its unique air-filled mattresses, over the years it has evolved into a multi-channel retailer with company-owned stores in about 48 states. Retail store sales have grown to account for nearly 90% of Select Comfort's total sales.
With its mattresses starting at about $700 and approaching $4,000 for its premium product, it's not surprising the recession and housing crisis took the air out of the air-bed maker's sales. The steep sales decline put a halt to Select Comfort's aggressive expansion plans. While the company had hoped to grow to more than 600 company-owned stores throughout the US in coming years, it is instead looking to end 2012 with about 410 company-owned locations, having shuttered about 100 stores since 2007.
After entering the Canadian market in 2005, Select Comfort in 2007 partnered with two Australian companies to make and distribute Sleep Number beds and accessories in Australia and New Zealand. Additionally, the company's air mattresses are found in luxury motor homes, and in nearly all of Radisson's hotel rooms in the US, Canada, and the Caribbean.
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