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 nearly 490 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.
Minneapolis-based Select Comfort operates company-owned retail stores in 48 US states. Its two largest markets are California and Texas, which combined account for more than 20% of its store base. The mattress giant distributes its products in the US and Canada, and in Alaska, Hawaii, and Australia through retail partners.
Sales and Marketing
Select Comfort increased its sales and marketing efforts in 2015, boosting spending to $550 million from $512 million in 2014 and $440 million in 2013. The company advertises on television, radio, and in print, and is increasing its use of digital advertising. More than 90% of its sales are through its retail stores with the online channel bringing in 6% of revenue. Wholesale accounts for 2% of revenue.
Select Comfort's sales increased 5% in 2015 compared with 2014, to $1.2 billion. Driving sales were higher comparable store sales as well as the addition of about 25 new retail stores. Net income slumped 26% over the same period, falling to $50.5 million. The company had higher expenses in 2015 than in 2014 as it developed a new digital presence and installed an enterprise resource planning system.
While Select Comfort began as a direct marketer of its unique air-filled mattresses, over the years it has evolved into a multichannel retailer with company-owned stores in about 48 states. Retail store sales have grown to account for more than 90% of Select Comfort's total sales.
The company redesigned its website to engage customers with the Select Comfort brand and generate store traffic. The number of visitors to sleepnumber.com increased 51% in 2015 from 2014.
The installation of an enterprise resource planning system from SAP ran into trouble in late 2015 and early 2016. Stores sales fell, customers experienced delivery delays, and there were higher returns and order cancellations. Problems seem to have been ironed out in the first quarter of 2016.
Mergers and Acquisitions
In 2015, Select Comfort acquired BAM Labs Inc. , a provider of biometric sensor and sleep monitoring for data-driven health and wellness. The acquisition broadens and deepens Select Comfort's electrical, biomedical, software, and backend capabilities in providing sleep-related information to mattress customers.