CEO of Purple finds retail aspect 'most challenging' in the company's business structure.
Shellin' Out for Better Snoozes: Purple's Premium Mattress Line and Its Challenges
ORLANDO, FL - A year goes by, and Purple, a bedding company known for its affordable and innovative mattresses, announces an upscale expansion. The new line, dubbed the Rejuvenate series, sports advanced technology, including double GelFlex Grid layers, dreamy cooling surfaces, and plush quilted Euro-tops. But the road to luxury has been tougher than anticipated, according to CEO Rob DeMartini.
As it turns out, consumers aren't as keen on splurging online for a premium mattress as they are for the cheaper models Purple became famous for. DeMartini admitted that the product transition wasn't cheap, either, chewing up the company's margin by at least three points.
Despite sluggish sales and a tough home goods market - down a whopping 7.5% in November and nearly 12% in October, as reported by the U.S. Commerce Department - Purple has managed to wiggle its way into 1,500 mattress slots across the nation. DeMartini remains optimistic, hinting that profitability is on the horizon.
"Truth be told, this company was on thin ice for the past couple of years," DeMartini shared, alluding to misjudging COVID-19 and lacking a solid wholesale structure. "But we've weathered the storm and have a bright future ahead. There are tremendous opportunities for this brand, but we're not getting ahead of ourselves just yet. We need to take the ball and run with it in the core market."
One unexpected challenge could be Tempur Sealy's acquisition of Mattress Firm, a major mattress retailer. Mattress Firm currently takes up about a third of Purple's wholesale business, with a presence in nearly half of the retailer's locations. However, DeMartini is confident in Purple's product differentiation, saying, "This ain't your average mattress - it's a gel-flex grid, and you'll either love it or hate it."
Purple's bricks-and-mortar strategy also faces hurdles. According to DeMartini, the retailer plans to TAP the brakes on store openings until they can ensure profitability. Hoping to recapture some of the irreverent, edgy spirit that first inspired consumers, Purple is planning a modernized version of its popular egg drop ad campaign.
"When we started out, our mattresses were fun, different, not exactly your grandpa's bed. I don't think we'll be bringing back Goldilocks, but you might see an updated egg drop," DeMartini teased.
- The AI-driven bedding company, Purple, had announced a premium expansion in its product line last year, dubbed the Rejuvenate series, featuring advanced technology.
- Despite a tough home goods market and sluggish sales in the premium mattress sector, Purple managed to secure 1,500 mattress slots across the nation.
- The CEO, Rob DeMartini, admitted that the transition to the premium mattress line had cost the company at least three points in margin.
- In the face of challenging industry trends, finance, and business, DeMartini remains optimistic about the company's profitability.
- Tempur Sealy's acquisition of Mattress Firm, a significant wholesale partner for Purple, could pose an unexpected challenge.
- Purple plans to get back to its roots by modernizing its popular egg drop ad campaign in an attempt to recapture its irreverent, edgy spirit.
- To ensure profitability and sustainability in its bricks-and-mortar strategy, Purple is considering a pause on store openings.
