Michael Traub (center), chief executive officer of Serta Simmons Bedding LLC, pays a visit to Tuft & Needle founders JT Marino (left) and Daehee Park at T&N’s Phoenix headquarters.
Atlanta-based manufacturing major Serta Simmons Bedding LLC and online disruptor Tuft & Needle have agreed to merge, creating “the No. 1 customer-centric house of brands” in the mattress category, according to a jointly issued Aug. 21 news release. Terms of the deal, which is projected to close at the end of September, were not disclosed. SSB is majority owned by global private equity firm Advent International.
The release cited many benefits to consumers of the merger, including a more consumer-focused shopping experience across all channels. It stressed that traditional retail remains critically important to mattress sales and that a segment of people always will want to test products before buying.
SSB estimated the overall size of the bedding industry at $17 billion and predicts 20% of all mattress sales for 2018 will be online.
“With this merger, we will have products available for consumers whenever and wherever they prefer to shop,” said Michael Traub, SSB chief executive officer.
SSB is the largest U.S. bedding manufacturer with revenues of more than $3 billion and 30 manufacturing plants producing its stable of brands: Beautyrest, Serta, Simmons and Tomorrow Sleep.
T&N was one of the first online mattress brands. It is a bootstrapped startup founded six years ago by John-Thomas Marino and Daehee Park. The profitable business had sales in 2017 of $170 million, according to an Aug. 21 story in Forbes. T&N products include the original Tuft & Needle mattress, the more premium Mint mattress and a selection of top-of-bed accessories, as well as several easy-ship frames and bases. The company claims an 80% market share on Amazon for mattresses priced above $500.
Marino and Park will join the SSB leadership team and report to Traub. They will take responsibility for guiding a new omnichannel approach at the merged companies and will direct the e-commerce strategy for all SSB brands.
“We started our company to fundamentally change the industry to focus on the consumer,” Marino said. “Traditional retail is a huge part of the needed change, and it will continue to be important to the shopping experience. The future of retail will be consumer-centric and the lines will blur with a digital presence. We’ve mastered this, and we’ll be providing guidance to our partners on how to as well.”
Each of the brands in the merged company’s portfolio will remain “unique and independent in the market,” according to the release. They will continue to be offered through traditional retail channels and direct-to-consumer.
