Tempur Sealy Expands Global Retail Distribution Network
Tempur Sealy International, Inc. (the “Company”) is broadening distribution of its bedding products by entering into two new third-party retail relationships and expanding an existing retailer relationship. The additional net sales from these three supply agreements are expected to be in excess of $400 million on an annual run rate basis once product launches are completed. The impact on the Company’s previously announced adjusted EBITDA guidance for 2019 is not expected to be material, with an initial estimate of incremental annual adjusted EBITDA benefit in the range of $75 million to $100 million beginning in 2020.
The Company announced it has entered into a supply agreement with Mattress Firm, Inc. (“Mattress Firm”), the largest specialty mattress retailer in North America, to reintroduce Tempur-Pedic, Stearns & Foster, and Sealy branded products into approximately 2,500 Mattress Firm stores across the United States. This agreement represents a significant opportunity for both companies. This agreement reunites some of the strongest bedding brands with the more than three million people a year that find their right sleep solution at Mattress Firm. The reintroduction of products into Mattress Firm stores is expected to commence in the fourth quarter of 2019 and to be completed early in the first quarter of 2020.
The Company also announced the recent expansion in its long-term supply agreement with Big Lots, Inc. (“Big Lots”), a 1,400-store retailer in the United States. This agreement is expected to grow the sales of entry-level Sealy products and to drive unit volume, primarily in the below $1,000 retail price point, a segment that has been a recent focus of the Company. Big Lots’ growing partnership with Sealy is evidence of the investments in product quality and manufacturing reliability that Sealy has made in recent years. Sealy’s launch of new products with Big Lots is expected to be complete by year end 2019.
As previously announced, the Company also recently extended its European retail distribution network by reaching a supply agreement with Beter Bed Holding, one of Europe’s leading bedding retailers. The launch of new products with Beter Bed Holding is expected to be complete by the end of 2019, and initially will include over 100 stores.
Tempur Sealy International, Inc. Chairman, President and CEO Scott Thompson commented, “The expansion of our distribution is a testament to the strength of our brands, coupled with reliable manufacturing and quality service. Our premium brands and innovative products have allowed us to service a growing customer base. We expect these newly reported transactions will have a positive impact on expanding our brands’ share of voice in the market and in leveraging our cost structure. Aligning with quality third-party retailers in a win-win structure is consistent with our distribution strategy.”
Thompson added, “While the most important aspect of our worldwide omni-channel distribution strategy is third-party retail distribution, we continue to pursue our highly successful direct to consumer initiatives, both online and through company-owned retail stores. Furthermore, the Company has also embarked on an initiative to capture additional market share in emerging e-commerce and big box retailer channels as a continuation of our focus to be wherever the customer wants to shop.”
The Company will hold a conference call on Wednesday, June 19, 2019 at 8:00 a.m. Eastern Time, to discuss further details regarding this release.
The dial-in number for the conference call is (800) 850-2903. The dial-in for international callers is (224) 357-2399. The call is also being webcast and can be accessed on the investor relations section of the Company’s website, www.tempursealy.com. After the conference call, a webcast replay will remain available on the investor relations section of the Company’s website for 30 days.
About Tempur Sealy
Tempur Sealy International, Inc. (NYSE: TPX) develops, manufactures, and markets mattresses, foundations, pillows and other products. The Company’s products are sold worldwide through third party retailers, its own stores, and online. The Company’s brand portfolio includes many highly recognized brands in the industry, including Tempur®, Tempur-Pedic®, Sealy® featuring Posturepedic® Technology, and Stearns & Foster®. World headquarters for Tempur Sealy International is in Lexington, KY. For more information, visit http://www.tempursealy.com or call 800-805-3635.
Aubrey Moore – Investor Relations – firstname.lastname@example.org – (800) 805-3635
Source: Tempur Sealy International, Inc.