Dive Brief:
- Mattress Firm President Steve Rusing is, as of Thursday, also CEO of that business, parent company Somnigroup International announced on Monday.
- Scott Thompson, Somnigroup’s chairman, CEO and president, had been serving as Mattress Firm’s interim chief executive officer since February following the departure of John Eck.
- Eck stepped down shortly after Tempur Sealy closed a deal to acquire the company for $5 billion, forming Somnigroup.
Dive Insight:
Somnigroup runs its three businesses — U.S. retailer Mattress Firm, wholesaler Tempur Sealy and U.K. retailer Dreams. The tie-up is set to not just save money but also boost sales of its own brands.
The company is on track to achieve at least $100 million in annual run rate net cost synergies with an estimated $15 million this year, $50 million next year, $35 million in 2027 and “opportunities thereafter,” executives told analysts earlier this month.
In 2024, Tempur Sealy represented a mid-40s percentage of Mattress Firm’s total sales, and this year that’s set to reach the low 50s, they said. The retailer’s comp sales were down slightly in the most recent quarter.
The combination of the president and chief executive roles will further the integration and its synergies, according to a statement from Thompson.
“Over these past few months, Steve has made a tremendous impact on the direction and strategy of Mattress Firm,” Thompson said. “Under his leadership, the team has sharpened their operational focus, building momentum, and driving solid performance as seen in the results we reported earlier this month. With Steve at the helm, I am confident that Mattress Firm’s best chapters are still ahead.”
Not long ago, Mattress Firm needed a wake-up call. Amid a surge of direct-to-consumer competition, the retailer in 2018 filed for bankruptcy and closed hundreds of stores. Mattress Firm still runs 2,200 brick-and-mortar stores, and the company plans to spend some $150 million to refresh many of them over the next three years, executives said this month.
The market dynamics have shifted again, with many of those DTC companies struggling. In at least one case, Mattress Firm is benefiting: Purple, where Q1 sales dropped 13%, in May said it is more than doubling its presence in Mattress Firm stores.