Andrew Pearlman, president of Lemoyne Sleeper, is committed to three principles he believes are crucial to the continuing success of his family business.
First, growth should be slow and steady. Second, fair play, integrity and a commitment to quality—the values his father, Jerry Pearlman, founded the company on in 1964—are as important today as they were then. Third, a multipronged business model that builds on Lemoyne’s roots as a factory direct is vital.
Pearlman began working at Lemoyne Sleeper when he was just 15. While he was learning the intricacies of the business from the ground up, he also absorbed what may have been the most important lesson his father had to teach.
“I learned how to treat our employees fairly and with respect. We are very family–oriented. There are people who work here that I’ve known longer than I knew my dad. They’re like my brothers, sisters, aunts and uncles,” Pearlman says. “We can laugh and joke around and still work very hard. It makes a big difference.”
Jerry Pearlman died in 2002. His partner at the time, Marty Lowy, continued in the business, helping Andrew Pearlman to run the company. Lowy is now retired, though still serves as a financial consultant.
When Pearlman took Lemoyne’s helm three years ago, he brought in Donald Kreisberg as a partner and chief executive officer. In October, he purchased Kreisberg’s share of the business and Kreisberg is now a business development consultant for the company.
A foundation as a factory direct
Lemoyne Sleeper employs about 50 people at its 100,000–square–foot headquarters in Lemoyne, Pa. The facility houses a 30,000–square–foot factory, as well as a warehouse, office space and a retail showroom.
“We produce about 250 pieces a day, except in the summer when sales for dormitories are high and we go to about 350 pieces a day,” Pearlman says.
In 2009, the company posted close to $10 million in annual sales. Thus far in 2010, sales are tracking a little ahead of last year.
“Five years ago, we were at almost $12 million in annual sales,” Pearlman says. “We saw a gradual decline because of the recession and now we’re seeing a gradual increase.”
Sales through the company’s 10 Lemoyne Sleeper retail stores account for about 45% of Lemoyne’s annual revenue. Wholesale sales to independent retailers and small chains contribute another 30%. The balance comes from the institutional, hospitality and contract segments.
In addition to the company’s mattresses, Lemoyne Sleeper stores sell bedroom furniture and sleep accessories, including chests, mirrors, headboards and footboards, futons, sheets, comforters and window treatments.
“Furniture and accessories are important add–on sales,” Pearlman says. “I’d like to see this category grow, but things are even tougher on the furniture side than they are with bedding right now.”
Pearlman owns half the factory–direct retail outlets; the other five are independently operated under licensing agreements. All are located in Pennsylvania. Pearlman recently closed two unprofitable stores and is guardedly optimistic about the performance of the rest.
“I don’t see huge magic happening as we come out of the recession,” he says. “The key is to maintain steady growth and, when we look at same–store sales, all are steady or up from last year.”
The factory–direct model gives the company an advantage over other mattress retailers, Pearlman believes.
“As a factory direct, we have a unique edge in the community. We’re always bringing new product to market, which expands our retail operations, and we manufacture product that competes well in both quality and price with national brands,” he says.
Susan Cahill, senior vice president of retail sales, adds, “We offer better value for the price. The community knows that they are not paying middleman prices and that if they have an issue they can come back directly to us.”
Though its foundation is as a factory direct, Lemoyne has a robust wholesale business, selling to about 80 dealers in Delaware, Maryland, New Jersey, New York, Ohio, Pennsylvania and West Virginia. While Pearlman would like to grow the segment, he doesn’t want to spread resources too thin.
“The wholesale side is volume–driven and very competitive,” he says. “We insist on maintaining our integrity in terms of quality and customer service, so we try to focus our energy on retailers in Pennsylvania and the surrounding states.”
Product particulars
Cahill joined the company in 1993 as a sales associate in a Lemoyne Sleeper store. Today, much of her job involves making certain that the 15–person sales staff is knowledgeable about the products the company sells and can communicate effectively with customers.
“Consumers have changed in the last five years. They used to walk in and purchase what they wanted; now they are focused on need,” Cahill says. “They don’t purchase mattresses very frequently and a lot has evolved in the product. It’s so important that our customers get educated about product and feel comfortable with their purchase.”
Lemoyne offers 45 models in five lines at its retail stores. The midrange Chiro–Guard collection features innerspring mattresses priced between $999 and $1,499 for a queen set. (The company’s innersprings start at $299.)
The company’s two premium collections are Night of Luxury and Natural Luxury. Night of Luxury includes seven models constructed with various combinations of memory foam, latex and innersprings. Natural Luxury features five latex models. Queen sets in the two collections retail for between $1,299 and $3,999.
Although innerspring sales have remained flat, the company has seen significant growth in specialty beds.
“When you look at memory foam compared to all other products, it’s been our fastest growing segment,” Pearlman says.
The company is focusing much of its research and development on products made using visco–elastic and latex, with a special focus on bringing items to market that are made from environmentally sustainable materials.
Pearlman isn’t ready to divulge details but says he has plans to introduce soon a product based “on ideas I’ve never seen in the market before.”
Boosting business
In the past, the company has relied on print and broadcast media to reach consumers. It recently beefed up its direct–mail efforts and has added online advertising on newspaper and television websites. Lemoyne also has revamped its own website.
“We are seriously looking at the Internet as a place to focus our marketing efforts,” Pearlman says.
Becoming a Bemco licensee in 2008 added a new dimension to Lemoyne’s wholesale business.
“While Bemco is currently a small percentage of our business, we see it growing,” Pearlman says. “It gives us another brand name to offer retailers and also presents multimillion dollar opportunities on the contract side of our business.”
Lemoyne’s contract business, which includes truck and dormitory mattresses, as well as beds for hotels, hospitals and nursing homes, dropped by 2% during the recession. The company recently hired a new sales representative dedicated to the segment and is hopeful about restoring lost sales.
Although Pearlman is cautiously optimistic about the direction of the economy as a whole, he is concerned about attitudes within the bedding industry that he believes work against sustained growth.
“From a manufacturing/wholesale perspective, my biggest challenge is trying to maintain our commitment to quality, integrity and service while staying competitive,” Pearlman says. “As an industry, we could do ourselves a favor by focusing more on the importance of sleep and its relationship to health. As a group, we have the power to awaken’ our customers’ desire for better health through better sleep.”
