With two new licensing partners, Pennsylvania Bedding is significantly expanding its sales territory, revising its business plan, ramping up manufacturing capabilities and hiring additional sales staff.
The 103–year–old privately held company began much of its multipronged transition as it came to the end of a 20–year licensing deal with Comfort Solutions and inked new contracts with Spring Air International and Therapedic Sleep Products.
The decision didn’t come easily for Pennsylvania Bedding, says Bill Spudis, president and chief executive officer of the company, which has headquarters in Old Forge, Pa.
The bedding maker knows that change can be difficult and that leaving a comfortable, decades–long relationship in a down economy involved additional risk.
Still, Spudis says, “We believe that it was the right move at the right time.”
The opportunity to vastly expand its sales territory was central to the company’s decision to sign new licensing deals. Through its arrangement with Comfort Solutions, Pennsylvania Bedding was limited to selling in upstate New York and part of Pennsylvania and couldn’t sign licensing deals with other brands, Spudis says.
Its combined territory with Spring Air and Therapedic includes all of Delaware, New York, Pennsylvania and Washington, D.C., as well as parts of Virginia and West Virginia.
New infrastructure
To take advantage of its new opportunities, Pennsylvania Bedding had to restructure its manufacturing facilities. It reconfigured its 87,000–square–foot factory to make room for $1 million worth of new equipment. With no room left for storage, the company moved components and raw materials to a rented 30,000–square–foot warehouse across from the plant.
Once the infrastructure was in place, developing a strategy to maximize sales in the new territories fell to sales manager Scott Wallis.
Spudis says: “With both of the new companies, we have the autonomy to do what we need to do in our market and the flexibility to produce the kind of product that will sell. Scott’s experience was key in deciding what products to produce and how to merchandise them. It was no easy trick.”
The Spring Air license brings Pennsylvania Bedding its own advantages, says David Adler, principal owner of the company and chairman of its board.
“Retailers know that the Spring Air name is strong with consumers and we now have one of the largest Spring Air licenses in the country,” Adler says.
Adler and Spudis cite Spring Air’s commitment to innovative product development as one reason for signing with the brand. Sleep Sense, one of Spring Air’s latest offerings, draws particular praise from the pair.
“In all the years I’ve been doing this, you can count pure innovations in the mattress business on one hand. Sleep Sense is one of them,” Spudis says.
“Sleep Sense gives us a patented, encased coil unit that can’t be knocked off,” Wallis adds. “It has a fantastic look and feel and is tremendous value for the money. It is probably the most exciting product I have seen in a long, long time and it’s flying off retail floors.”
Sleep Sense queen–size sets have suggested retail prices from $1,200 to $2,000, but Pennsylvania Bedding offers mattresses from both the Therapedic and Spring Air brands across all price points.
Brands change; values don’t
The company has made one other significant change in its product lineup: It no longer produces its own private–label product.
“Once we signed with Therapedic and Spring Air, we put all our loyalty to them,” Spudis says.
Loyalty was very much on the minds of company executives as they considered how best to present the brand changes to their customers.
“I wanted them to know that just because the brands we were producing were changing, Pennsylvania Bedding was not,” Spudis says. “King Koil recognized us multiple times as a top–quality plant. I didn’t want customers to think that any of that was going away.” (King Koil is Comfort Solutions’ previous corporate name and still a major brand for the company.)
Letters to current and prospective customers stressed the company’s core values of consistent quality, product innovation, reliable service and a stable, experienced staff. At the same time, the company’s sales staff emphasized new operational and marketing opportunities Pennsylvania Bedding would bring to retailers.
“In our new world, retailers can be exclusive customers of Pennsylvania Bedding and have two brands,” Wallis says. “We can make it a lot easier for them and that’s what gets their attention.”
Wallis has been helping retailers focus on ways to get more customers into their stores. A major advertising program that includes direct mail and newspaper inserts is in the offing. His chief goal, however, is finding ways to help retailers become more sophisticated in their own marketing efforts.
“For the most part, our retail base is mom–and–pop independents,” he says. “They need to look quickly into Web technology, update their customer lists and begin running private sales to bring old customers back.”
What’s ahead
Pennsylvania Bedding’s most significant challenges, however, lie in what company officials frequently call their “new world.”
“Without a doubt, our biggest challenge is in developing our new territories,” Spudis says. “We need to get our name out there and show product. We’re working hard to hire and train the staff to do just that.”
So far, the company has hired six new sales representatives and is planning to add more. This fall, management expects to start running a second shift at the factory.
Although no one at Pennsylvania Bedding dismisses the possible negative effects of a still–sluggish economy on their plans, they remain optimistic.
“We’re setting our table. There’s a lot of pent–up demand out there and people will come back. If we have our table set correctly with product and distribution, we should get more than our share,” Wallis says. “The opportunities seem endless.”
