Producer, wholesaler and retailer has added capacity, channels and products
Even though Brooklyn Bedding doubled its production and warehouse space in January with the opening of a second facility near its headquarters in Phoenix, the company already is making plans for another expansion that would position it for additional growth.
“The way things are going, we are going to need more capacity soon,” says John Merwin, chief executive officer of the bedding manufacturer, retailer and wholesaler. “Our goal is to get everything under one roof again so that we can maximize efficiencies and speed to market.”
Phoenix, where it operates a 145,000-square-foot mattress production facility and a 150,000-square-foot warehouse and components production facility. The company has 270 manufacturing staff and a total team of 350, including retail, delivery and executive staff.
Producer, wholesaler and retailer of memory foam, latex, alternative latex foam and hybrid boxed beds with 24 company-owned Brooklyn Bedding stores in Arizona and Utah and a growing base of wholesale customers.
Founded in 1995 when brothers John and Rob Merwin began selling liquidated bedding and comfort returns to customers in Arizona under the banner of R&S Mattress Liquidators. Brooklyn Bedding, a manufacturer, was established in 2008 to supply boxed beds for online sales.
John and Rob Merwin
Brooklyn Bedding took a similar step in 2015 when it opened a $9.1 million, 145,000-square-foot factory in Phoenix. Before that facility opened, Brooklyn Bedding manufactured its mattresses across four plants in the Phoenix area, producing about 600 mattresses a day. When it consolidated, the company upped its production to 1,200 mattresses during a typical day’s shift.
But, with sales soaring both online and in-store, it wasn’t long before even more space was needed. In December 2018, the company leased an additional 150,000-square-foot facility, also in Phoenix.
“When we built our modern manufacturing facility from the ground up in 2015, we were in awe of how spacious it was,” Merwin says. “We believed we had ample growth for many years to come. But just over three years later, we were already bursting at the seams.”
The leased site is being used mostly as a warehouse, enabling Brooklyn Bedding to maintain stock of best-sellers for quick shipment to retailers, as well as raw materials used in production. In addition, the company has started building its own mattress springs in the space. By the end of the year, when it finishes installing six new machines, the company expects that nearly all of its springs will be made in-house.
“We’re always looking for ways to be more vertically integrated, since that improves both costs and efficiencies,” Merwin says. “It also helps us be more innovative, since it gives us more direct control over what goes into our products.”
“The mobile mattress guys”
Brooklyn Bedding traces its roots to 1995 when Rob Merwin opened R&S Mattress Liquidators, a small store in Mesa, Arizona, specializing in discounted, liquidated mattresses for quick delivery to customers’ homes. Soon after he started the business, he was joined by his brother, John Merwin, who moved down from Montana with his wife, Kristin Merwin, to open a second store in the Phoenix area.
Promoting themselves in local newspaper ads as “the mobile mattress guys,” the brothers delivered beds throughout Phoenix’s Valley of the Sun area in a refurbished 1974 Wonder Bread step van. They quickly established a growing base of customers but then were forced to adjust their business model when their main source for beds — Montgomery Ward — went bankrupt.
To find a new source, the brothers started hunting for deals among regional bedding majors, buying closeout and excess models, as well as leftover and obsolete raw materials. As business grew, they hired a local manufacturer to turn these discarded materials into beds for sale in their stores, but when their partner lost interest in the enterprise, John Merwin took things into his own hands and opened his own factory.
“I realized I needed to learn how to make our own quality beds to sell in our stores,” Merwin says.
Because he had no previous bedding production experience to draw on, the learning process involved a lot of trial and error. But the regular pilgrimages Merwin made to local bedding plants to shop for cast-off materials proved to be educational. The visits gave him a glimpse into different approaches to mattress manufacturing — and into what systems and setups might work best for the brothers’ own operation. And because he was working with an odd assortment of materials the larger manufacturers had no use for, Merwin also learned to make the most out of virtually any material — and any machine.
“I might have 30 minutes or an hour when I’d visit a factory,” he says. “They were there to sell me a product, so nobody was explaining how things worked, but I’d always come away with a new idea or insight. We weren’t afraid to fail, so we made a lot of mistakes as we developed our own unique approach.”
That willingness to experiment came in handy in 2008 when Brooklyn Bedding — named after one of John Merwin’s daughters — was launched as a separate company to serve the growing demand for online mattress sales. Encouraged by his wife, who insisted the opportunity was too big to ignore, Merwin decided to figure out how mattresses could be packaged for sale through e-tailers such as Amazon. He traveled to China, where he watched three men hand roll a flattened mattress, thinking maybe he would import some compressed beds. Then, in 2010, he went ahead and purchased a $135,000 machine from an Italian supplier “so we’d have the ability to easily compress and roll mattresses ourselves.”
Today, Brooklyn Bedding designs all of its mattresses for compression and shipment in a box. Far from a fad, this method of production and shipping simply makes good business sense, providing a more efficient way to move bulky beds from point A to point B, Merwin says. He expects that in the next five years, the lion’s share of beds made in the United States will be packaged this way.
“With a few tweaks, any bed can be boxed. Virtually all of the mattresses we make get rolled up for shipment,” he says. “Our production is set up so that finished beds go directly into a box once they come off the line, saving money on both shipping and storage.”
In recent years, Brooklyn Bedding has developed three strong channels of distribution for its products. The first is its network of 24 brick-and-mortar stores, now all operating under the Brooklyn Bedding banner.
The second channel involves online selling through its own branded websites, as well as through third-party e-commerce specialists, such as Amazon. This program provides e-tailers with a curated assortment of Brooklyn Bedding-branded products with a minimum advertised pricing policy, plus products that can be branded and priced at the retailer’s discretion.
The third channel, which Brooklyn Bedding is expanding, involves wholesaling to brick-and-mortar retailers for sales in-store or online. The company has long been active in this segment but, with the opening of a permanent showroom at the Las Vegas Market in January 2018, it is steadily adding new customers. It now serves a strong base of leading independent furniture stores and bedding specialists throughout the country.
“We’re manufacturing mattresses for both online and traditional retailers who either want to leverage the Brooklyn Bedding brand and offer a highly curated assortment of our products or sell variations of our bedding under private labels,” says Tim Dilworth, Brooklyn Bedding chief operating officer who joined the company in 2017. The fact that Brooklyn Bedding has the capability to produce beds on demand — while also maintaining a stock of best-sellers in its warehouse for immediate shipping — means that the retailers it works with can carry little or no inventory, Dilworth adds.
To support these customers, Brooklyn Bedding now offers free same-day shipping and also provides a variety of tools to help drive traffic, including an online store finder and free advertising collateral.
“Our increased production capacity means customers don’t have to wait another night to get the best sleep ever,” Dilworth says. “Offering free same-day shipping to our key wholesale and retail customers is a bold initiative that will further differentiate us in a highly competitive industry.”
As part of the drive to expand its wholesale business, Brooklyn Bedding formed a new partnership with the Furniture First buying group in 2018. The arrangement is still in the early stages, Merwin says, but sales are expected to grow. Currently, three bed profiles are offered.
Brooklyn Bedding also holds an investment position in Nest Bedding, a mattress retailer with 15 locations in Chicago, Denver, Los Angeles, Minneapolis, New York, Phoenix, San Francisco and Seattle. Owned by Joe Alexander, Nest Bedding sources nearly all of its mattresses as a proprietary line built to its specifications by Brooklyn Bedding.
“We don’t see ourselves as direct competitors with our expanding base of retail customers,” Merwin says. “Much of the product we do for the wholesale side of our business is private label, so there’s a lot of differentiation in the feature sets. There’s plenty of space for all of us, and we’re as happy to have our partners succeed as we are to succeed in marketing our own brands.”
Brooklyn Bedding offers three distinct private-label options to retailers. Generic private-label products carry Dreamcatcher branding. Retailers are free to price and advertise the products any way they wish. The second option allows retailers to apply their own branding to Dreamcatcher products, also with no pricing or advertising requirements. And third is the custom private-label program, in which retailers work with Brooklyn Bedding’s team to create their own branded line of mattresses.
A focused range of choices
In its own line, Brooklyn Bedding offers a wide assortment of memory foam, latex, latex alternative and hybrid mattresses, as well as pillows, sheets, protectors and foundations. Best-selling models include the No. 1 model, Brooklyn Aurora, a hybrid mattress with a layer of CopperFlex foam for pressure relief and a TitanCool-infused surface, retail priced at $1,699 for a queen size; and the Brooklyn Signature, a hybrid with TitanFlex latexlike memory foam, TitaniumGel cooling and a 6-inch base of individually encased coils, priced at $949. Marketed online as the #BestMattressEver, the Brooklyn Signature has been one of the company’s best-sellers for several years. The company gave the mattress a major redesign in 2018 to freshen its appeal.
“The Brooklyn Signature mattress is loaded with lots of premium features at a hyper-competitive price,” Merwin says. “It solves the No. 1 problem consumers face in sleeping — getting hot — by infusing both top foam layers with a very effective cooling treatment. And by replacing the previous base foam with individually encased coils, we were able to dramatically improve the sleep experience.”
With its product assortment, Brooklyn Bedding tries to keep things simple for the consumer while offering a mix of proven comfort and support features. “Consumers don’t want to be overwhelmed with choices, but they also need more than the one-size-fits-all approach that many online boxed bed companies promise,” Merwin says. “Different sleeping styles and comfort levels demand different mattresses, even when you are working with a supportive, natural foam like latex.”
Although Brooklyn Bedding offers several promotional models priced below $1,000 for a queen, the bulk of the company’s sales fall in the $1,000 to $2,000 range. In the past few years, its price points have been edging up as new technologies have been introduced and consumers’ willingness to invest in quality sleep has grown. Dilworth expects that trend to continue.
“When a shopper comes into a store and sees what our better beds have to offer compared to the old worn-out bed they are sleeping on or a basic entry-level model, they spend the extra money to get a quality bed nearly every time,” Dilworth says.
To provide a range of choices for different types of sleepers, each Brooklyn Bedding model comes in three comfort levels — soft, medium and firm. Brooklyn Bedding backs all of its products with a 120-day trial period and a 10-year warranty.
In addition to its standard line, Brooklyn Bedding has developed four brands to meet specific sleepers’ needs. They include Titan, a “plus-size” solution for heavier sleepers that combines two layers of high-quality foam with heavy-duty coils; Plank, a flippable mattress with standard firm and extra-firm sides for sleepers who like the option of an ultra-firm surface with zero loft; EcoSleep Hybrid, a flippable, eco-friendly hybrid bed that combines Talalay latex, Joma wool and organic cotton; and Propel, which features Upcycle, a far infrared rays textile technology that is said to accelerate the natural recovery benefits of sleep.
Each of these brands has its own website to enhance their ability to reach specific niches in the market.
“As one of the few retailers in the mattress industry to manufacture our own products, we have a unique window into what consumers are looking for in a bed,” Dilworth says. “We can test new concepts in a few stores and get a quick read on customer reaction to see whether they should go forward.”
These insights also help the company determine which beds will do best in brick-and-mortar stores and which are a better fit online, “and they also inform the products we develop for our customers, too,” Dilworth adds.
Company Expanding, Upgrading Stores
Recognizing an opportunity to increase its presence in its home market of Arizona and neighboring Utah, Brooklyn Bedding is stepping up its retail network on two major fronts. First, it is expanding its store network by adding new units in more upscale locations. Second, it is enhancing the in-store experience to make its stores an even more attractive destination for shoppers.
This year, the Phoenix-based producer, wholesaler and retailer added five new brick-and-mortar stores. The store count now stands at 24, with 22 units in Arizona and two in Utah.
According to John Merwin, Brooklyn Bedding chief executive officer, the new sleep boutiques are located in high-end, high-traffic areas and provide an elevated in-store experience for shoppers who want to see, touch and feel a variety of new mattresses before making a purchase.
The stores offer an “affordable luxury” assortment of products and are staffed with sleep experts who assist customers in finding a personalized sleep solution, Merwin says. Purchases made before 3 p.m. are eligible for free same-day delivery.
“While we’re known for being among the first to sell mattresses online with boxed bed delivery, we’ve never lost sight of the high touch factor when it comes to making a decision about something as personal as the sleep experience,” Merwin says. “Our goal is to continue to launch new sleep boutiques in high-traffic areas, in addition to updating more of our current locations.”
Many of Brooklyn Bedding’s older stores, designed for when the company focused on closeout merchandise, operate in smaller spaces of around 2,500 square feet, with less traffic and visibility. The newer locations have larger footprints of 3,500 to 5,000 square feet.
“We’ll be looking for new locations for these older sites as our leases come up,” Merwin says, explaining that the old R&S Mattress Liquidators banner, which the company’s stores originally operated under, has been phased out.
Brooklyn Bedding also is eyeing several other neighboring states, such as Colorado, Nevada and New Mexico, for possible expansion. In the long run, Merwin says, the new Brooklyn Bedding format has national potential, and he envisions stores in major markets from coast to coast.
“There are several advantages for customers who visit our new boutique stores,” Merwin says. “Obviously, they get to try each mattress firsthand and speak directly with a sleep expert in finding the perfect fit. But beyond that personalized attention, customers who shop at our brick-and-mortar locations have access to mattresses and adjustable power bases not available anywhere else.”