When Mike Hammer bought Shifman Mattress Co. 25 years ago, he was betting that he could turn the moribund company around and capitalize on a key asset—a history of turning out high–quality, handcrafted mattresses.
Doing so, he believed, required two things. First, the company could never sacrifice quality for price. Second, it needed a network of strategic partnerships with upscale furniture retailers and department stores.
The formula worked, though not immediately.
When Hammer purchased the company from Robert and Burton Shifman, grandsons of one of the founders, it had deteriorated badly. Shifman, based in Newark, N.J., hadn’t turned a profit in years, its products looked dated and the company’s equipment only worked about half the time. An entrenched work force made change almost impossible.
“The favorite word around here was ‘no’, ” Hammer recalls.
Hammer was stuck. In order to implement his business plan, he had to change the company’s culture, upgrade production capabilities and redesign product. He needed help—and his family agreed to provide it.
Family affair
Hammer’s wife, Eileen, and their two oldest sons, Robert and Mark, helped run the business for five years so that he could go on the road to sell. Drawing on 22 years of mattress industry experience—first with Simmons Bedding Co. and then with Stearns & Foster—Hammer shifted the company’s focus to high–end furniture retailers, offering them exclusive product and a traffic–driving marketing program.
“We ran on fumes, but were able to triple business in the first four years, which made survival possible,” Hammer says.
Today, the 117–year–old company is thriving. After surviving the recent recession, it is once again opening new accounts and taking steps toward becoming a nationally recognized brand.
“Our sales were up 30% in the first 10 months of 2010,” Hammer says. “We were expecting 20% and we will exceed that for the year. This will be our biggest year ever and we expect continued growth in 2011.”
The Hammers’ youngest son, Bill, joined Shifman in 1994 and became president two years ago. He is convinced that his father’s early struggles and unwavering commitment laid the foundation for today’s success.
“I am fortunate to lead a company that is based on building relationships and maintaining quality,” Bill Hammer says. “Our commitment to strong relationships extends to every employee, every customer and every supplier. It means doing business on your word and keeping that word. It means honesty, no false promises and always reaching for the best.”
Retailer relationships
Shifman currently sells products to 38 furniture stores and to all Bloomingdale’s department stores.
“The growth of new accounts has been staggering,” says Wayne Pezzino, Shifman national sales manager. “In the past two years, we’ve opened more accounts than in the previous six years combined.”
Shifman asks a lot of new accounts: Retailers must set aside enough floor space to display 12 mattress sets. They also must carry inventory commensurate with their monthly sales rate. But the company provides strong marketing and co–op advertising support in return. All retailers receive a product DVD, advertising slicks, postcards and point–of–purchase materials.
“We also bring, at our cost, every single sales associate and interior designer to the factory for a tour and direct training,” Pezzino says.
The factory tour is nonnegotiable. The Hammers want their retail partners to have a full appreciation of what goes into a Shifman mattress and why it takes between 7 ½ and 12 ½ hours to produce each one.
“We share responsibility with the stores for sales and for the profitability of the line,” Mike Hammer says. “In most of the stores that we’re in, we rank first or second in terms of sales per square foot and profitability per square foot.”
Marketing matters
Shifman executives believe that recent changes to the company’s marketing strategy have improved its ability to get the Shifman story out to dealers and consumers alike.
In October 2009, Shifman debuted its product at the High Point Market in High Point, N.C. The company now has a permanent showroom in Hamilton Court and shows at the April and October furniture markets.
“Before, we were putting product on a truck and taking it to remote locations to show it to retailers,” Pezzino says. “Then we’d have to tear it down and take it back to New Jersey. Now we can get our name and product out there in a much more effective way.”
Showing its product at market is one part of a commitment Bill Hammer has made to better align Shifman’s message with the quality of its product.
“I want the Shifman brand to be represented properly and to be visible across the country,” he says. “We have to be able to show people that we build the best bed and offer it at the best price.”
The company also has hired a public relations firm “to clean up our message and create a website that portrays the image of a quality manufacturer,” Bill Hammer says.
Shifman’s new marketing program fits neatly with the company’s goal of nationwide selling.
Until recently, most of its retail accounts were in an East Coast territory stretching from Maine to Washington, D.C. But Shifman recently added accounts in the Atlanta, Chicago and Cleveland metro areas, as well as in Florida. Bloomingdale’s stores in Arizona, California and Colorado help extend the brand’s reach even farther west.
Shifman and Bloomingdale’s have a relationship that dates to 1995. The mattress maker launched its newest line for the retailer in December. The 15 models in the Handmade collection have suggested retail prices between $3,200 and $12,500 for a queen set. Three of the groups within the collection incorporate latex, in addition to the layers of cotton, cashmere, silk and wool that are the company’s signature. Two–dimensional Belgian damask and matelasse tickings are used throughout the collection.
Mixing tradition with innovation
To meet other dealers’ requests, Shifman introduced Pure Comfort, its first noninnerspring latex collection, in 2010. The three beds, each with a latex core, have suggested retail prices between $2,200 and $4,000.
But the heart of Shifman’s business continues to be its two–sided innerspring mattresses.
Beds in the top–of–the–line Masters collection—with retail prices between $3,000 and $6,000 for a queen set—contain thick layers of cotton, as well as latex, to provide comfort. The company plans to remerchandise the collection in 2011 to further enhance its aesthetic appeal.
The company also makes the Ultra–Premium collection, with retail prices between $2,100 and $3,000, and the Quilted collection, with prices between $699 and $1,799.
Shifman produces its entire line at its 92–year–old, 84,000–square–foot headquarters. An extensive renovation finished in 2008 added 40,000 square feet to the facility, including new warehouse space. The project also allowed the company to reorganize production flow.
What’s next
Bill Hammer believes that Shifman’s commitment to quality and building strong relationships will continue to propel growth. When he looks to the future, he sees Shifman as “a recognizable brand throughout the country” and he is exploring the possibility of distribution centers, an expanded transportation system and a new factory to support that goal.
Mike Hammer concludes: “I believe Shifman’s reputation will grow substantially. Someone has to be the best and I believe that it’s this company.”
