Serta Restokraft going strong after 100 years

For a hundred years, the owners of Serta Restokraft Bedding Co. have grounded their business in the bedrock principles of respect, loyalty and common sense. Larry Kraft, the company’s current owner, president and chief executive officer, believes it is because of these principles that the Romulus, Mich.-based mattress manufacturer has continued to flourish.

As Kraft and his employees honor the company’s past during this centennial year, his commitment is to the future and to maintaining his company’s viability for years to come.

Larry Kraft at the Serta Restokraft mattress plant
Continuity Serta Restokraft owner Larry Kraft operates the company using many of the lessons taught
to him by his grandfather, Harry, and father, Eugene.

Serta Restokraft was founded in 1913 as Progress Bedding Co. by Kraft’s grandfather, Harry Kraft. As the story goes, Harry Kraft immigrated to Detroit from Russia and began making mattresses after being fired from Ford Motor Co. because he worked too fast for the assembly line. When the company became a Serta licensee in 1953, its name was changed to Serta Restokraft.

Larry Kraft began working in the family business as a boy and remembers his grandfather well.

“I spent a lot of time at the factory with my grandfather and father (Eugene Kraft) and learned from both. They taught me that when you work with people in business, you must do your very best to treat them with respect,” he says. “I learned that we’re all cut from the same cloth and it’s only the chance of parenthood that separates us.”

By example, Harry Kraft taught his son and grandson the importance of getting your hands dirty.

BRIEFLY
Serta Restokraft Bedding Co.
Headquarters Romulus, Mich.
Specialty A Serta licensee since 1953
Founding Started by Harry Kraft in 1913 as Progress Bedding Co.
Ownership Now controlled by the third generation and owned by Larry Kraft

“Our building had a railroad siding,” Kraft says. “When the rail cars came in, my grandfather would take off his coat and tie, climb into the cars and unload the bales of cotton with the workers.”

From his forbearers, Kraft also learned that mutual respect can breed a loyalty so deep that it can save a company, as happened during the Detroit race riots in 1967.

“I believe that it was that kind of mutual respect that led individuals, when there was grave potential that the business would be destroyed, to protect it,” he says. “On their own initiative, they put themselves on the roof with guns to protect their livelihood and to protect my grandfather.”

Respect continues to be a source of strength for the company.

“We’ve been a unionized facility for as long as I can remember,” Kraft says. “I’m involved in contract negotiations and I’ve worked side by side with the people on the bargaining committee. When I make my presentation, I think they understand that I’m being honest. They trusted my grandfather and father, and I think they trust me. That trust helps me run the business.”

Success with Serta
If some things have remained constant through three generations, others have changed dramatically. Progress Bedding started life as a three-person operation in a converted stable. Today, Serta Restokraft has 120 employees and a 148,000-square-foot facility that produces 230,000 mattresses annually.

Serta Restokraft moved into the facility in 2001. Since then, the company has doubled the size of its business, both in terms of units produced and annual sales.

“We are expecting a 10% increase in sales annually for the next 10 years,” Kraft says.

Kraft’s confidence comes from his belief in the strength of the Serta brand and in the relationships that Serta Restokraft has built with its customers.

“Serta corporate has made a commitment to innovation and brand advertising that has helped to attract and keep new customers over the years,” he says. “As a family business, we have made a commitment to treat our customers and employees as family and I don’t take family for granted. The sum of all these things grows business.”

Steve Sterling, vice president of sales and marketing, believes that Serta-branded products are well-positioned for continued growth.

“Serta grew by 18% in 2011 and 26% in 2012 and (in 2012 was) the No. 1 mattress manufacturer in the country,” Sterling says. “This growth has been spearheaded by both the marketing of the product and the product itself. Serta does a good job of hitting a wide array of (traditional) media and makes sure that we stay in the forefront of social media. With product, innovation is the key, and I think our iComfort gel-infused beds are one of the most significant introductions in the bedding industry in the last 20 years.”

Serta Restokraft began producing the first generation of iComfort mattresses in 2011. All six models, which range in suggested retail price from $1,299 to $2,999 in queen size, feature gel memory foam.

“When you lie upon them, every bed has a different comfort level,” Sterling says. “As you work your way up (the price point range), the beds feature additional memory foam and latex. Prior to this, all specialty beds pretty much felt the same.”

In January, Serta introduced iComfort Directions, which Sterling calls “the most technologically advanced bed on the market.” The line takes its name from its four-layer structure, which, Sterling says, “provides support and comfort from all directions.”

The cover of the mattress is made of Thermo°Cool fabric enhanced with Tencel fibers to improve heat and moisture flow at the sleep surface and to resist the growth of mold, bacteria and dust mites. A second layer of Serta’s EverCool Gfx memory foam and graphene, a mineral that conducts heat, work to keep heat away from the body and provide support. The third layer uses Cool Action Dual Effects memory foam to provide zoned support and to transport heat away from the mattress layers above it. Finally, a Pods gel-activated support layer, combined with a Comfortlast foam core, creates support and a firmer seating edge. Suggested retail price points for the four iComfort Directions models range from $1,999 to $2,999.

Serta Restokraft also offers other Serta lines, including its new Perfect Sleeper innerspring group. All mattresses in the line’s three collections are compatible with power bases. The line opens with the promotional Essentials collection and tops out with the Smart Surface Elite collection. Price points range from $299 to $1,299.

“Key price points range from $799 to $1,299,” Sterling says. “All beds in this range feature Smart Surface technology and either gel-infused memory foam or gel-infused latex under the quilt.” The company also manufactures Serta’s Five Star line.

Accessory sales are becoming increasingly important for Serta Restokraft. Sales of adjustable bed bases began to spike with the introduction of iComfort beds, Sterling says, and are now “exploding.” He sees significant growth potential for pillows, protectors and other top-of-bed items.

“I think that accessories, primarily pillows, can become 5% to 10% of our annual sales over the next three to five years,” Sterling says.

Building relationships
Ten full-time Serta Restokraft sales representatives sell product throughout Michigan and the northwest corner of Ohio. Channels include furniture and sleep shop chains, independent sleep and furniture stores, department stores, Sam’s Club locations and hotels.

Serta Restokraft centennial celebration
Centennial celebration Serta Restokraft marked its first 100 years in business by making a donation to Kids Kicking Cancer, a martial arts program for ill children. The kids were invited to demonstrate their skills at a party on July 21.

“Our company is dedicated to fostering relationships with our retailers and helping them to grow their business,” Sterling says. “We know all of our customers and we’re available to them every day.”
Kraft is intent on growing the hospitality segment of his business.

“We’re shooting on having 10% to 12% of our overall dollar volume come from contract sales,” he says. “We also need to always be looking for new channels of distribution. Today, more and more appliance stores are selling mattresses. There’s a risk that you may pick a channel that upsets retailers, but if you’re going to survive, it may be what you have to do.”

Although Kraft feels strongly about the continued success of Serta Restokraft, he recognizes the challenges ahead.

“We don’t have a monopoly on innovation,” he says. “Everyone and their brother have viscos and memory foam. There are an immense number of competitors out there, all producing the same thing. The economy is another obstacle. Take away the payroll tax credit and that’s 2%, which can be a huge chunk of money to some. Fuel prices and the cost of food also take a toll on families.”

Celebrating success
Kraft is grateful for the distance his company already has traveled and decided that the best way to show his gratitude was by giving back to the community that has supported Serta Restokraft for 100 years.

First he and his wife, Jackie, made a donation to Kids Kicking Cancer, a nonprofit organization that teaches children with cancer to manage the pain and stress of their disease and treatment through the martial arts. And then, to raise additional awareness about the organization, he invited the children to demonstrate their martial arts skills at the party he hosted to celebrate the company’s centennial year on July 21. The children spent the rest of the day at a martial arts-themed event put on by the Disney organization.

And what does the road ahead look like for the company? Kraft refuses to speculate, but he does say: “We plan to be around for a very long time.”