Company prepares for a major Stearns & Foster launch
By Alan Wolf, YSN
Tempur Sealy said a slowdown in consumer demand during the fourth quarter, particularly for entry-level products, has helped the mattress maker work down back orders and take customers off allocation.
On a conference call last week with financial analysts, Tempur president/CEO Scott Thompson said the Omicron flareup and normal seasonality allowed the company to make “significant progress” in working down its record $100 million Tempur-Pedic backlog, and that the brand is now operating under a normalized order-to-delivery time. Sealy customers, he added, were taken off allocation at the end of October.
“We enter 2022 in an improved position to meet customer’s demand for our brand and products,” Thompson told investors on the fourth-quarter earnings call. “We’ve removed customers from allocation and our lead times have normalized,” he said, and the company is no longer turning away new business.
Thompson said the supply chain is still beset by issues, but that they are now largely limited to COVID-related labor challenges. “Is [the supply chain] perfect? No, it’s not perfect … There might still be some inefficiencies in the manufacturing from a people standpoint, from absenteeism … but the supply chain is generally in pretty good shape.”
“I’m going to say we’re damn near close to normal,” he said.
To insure things stay that way, the vendor plans to invest an additional $300 million in manufacturing capacity, which will go toward a third U.S. foam-pouring plant, now under construction in Indiana, and the expansion of existing factories and warehouses.
“At a time when world is little complicated, we certainly are making some investments to make sure that we service our customers in the best way possible,” Thompson said. “We’re committed to do everything necessary to make sure that this next year we deliver in a way that we’re used to for our customers.”
Elsewhere, Thompson said the company is planning to spend a record $550 million in worldwide advertising this year, which includes a major push for its legacy Stearns & Foster brand in support of a new product line. He said the updated collection, expected to launch in late 2022, is designed to “further distinguish our high-end, traditional innerspring brand with superior technology, a clear product step-up story, and a new contemporary look.”
“We’re talking about taking a brand that has been relatively minor and moving it into a category of a $1 billion brand at very good margins for us and very good margin for the retail,” he said. “So, this is a major move; it is not a normal Stearns launch.”
Also on the product front, Tempur said it plans to launch an expansive new line of premium Sealy products, including a significant upgrade of its hybrid mattresses; an all-new collection of premium foam mattresses with improved comfort, support, and cooling capacity; and a Sealy branded eco-friendly mattress collection.
Thompson added that the investments are based on projected sales gains of between 15 percent and 20 percent for the company this year.