The Creator of Mesh Food-Grade Silicone Rubber Material


Is Tempur Sealy\'s Nightmare Just Beginning?

by:OPeREAL     2019-08-16
Tempur Sealy (TPX -Get Report)
On Monday, Wall Street was shocked after the contract was terminated with the largest client mattress company.
Shares of Tempur plunged 27. 98% to $45.
Yesterday 50, fell 4. 26% to $43. 55 in mid-
Trading this afternoon
The mattress company, which was acquired last year by South African home retailer Steinhoff International, relies on Tempur Sealy and Serta Simmons as the main supplier of branded mattresses.
UBS analyst Michael Lasser said in a report today that the impact on Tempur is not just the sales loss caused by this relationship.
He believes that without the support of the largest bedding retailer, Tempur may find it more difficult to maintain its pricing capabilities in cheaper alternatives.
\"At the very least, we think it needs to maintain a lot of advertising investment to keep its brand relevant and market share,\" Lasser said . \".
At the same time, mattress companies need to find a way to replace the lost volume, which may lead to a more competitive Tempur.
UBS says mattress companies account for 21% of global sales, but that figure is close to 25% --30% in the U. S.
According to the company\'s calculations, sales in North America in Tempur may fall by about 17% in 2017.
Seth Basham and Nathan Friedman, Wedbush analysts, said that this termination could put serious pressure on revenue, as much of the loss would be difficult to replace with other retail partners.
This is also a \"other blow\" to the company\'s brand value, which has recently been shaken in the face of new disruptive competition.
Wedbush looks more favorable for comfortable sleep bed machine selection (SCSS)
As the company may be able to capture some of the displaced Tempur-Pedic share.
The end of the contract is the \"earthquake in the industry\" and opens up a lot of opportunities among other participants, said Stan Stanich, CEO of Stanich Communications, a leading US agency. S.
Home decoration part.
Beneficiaries can include mattress manufacturers, regional retailers and online mattress startups such as Casper, Helix and Leesa, which offer cheaper alternatives.
Casper was launched in 2014 with revenue of $0. 2 billion in 2016.
Because the company cut off the bricks. and-
Casper can sell products at one time as a distribution partner
In an interview, CEO Philip Klean said that if they sell through traditional mattress retailers, the cost would be third.
\"Consumers realize they don\'t need to go to the mattress store to buy quality products,\" Krim said . \" About 80% of people began searching for mattresses online, he noted.
He also said that the industry has shifted to direct-to-Consumer brands.
Krim heard that Tempur and the mattress company had concluded their contract and believed that the move would accelerate direct-to-
Consumption channels.
\"Casper is well prepared to take a big share in the transformation of this channel,\" he said . \".
Steinreich said there are more competitors in the mattress sector of $3,000 and above.
Consumers are now more likely to invest in better sleep because they think it\'s part of their overall health, he notes.
As a result, more consumers are willing to pay more for better products, and mattress retailers such as Tempur face competition from the private sector.
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