Vertically integrated Mlily is adding two big production plants in the U.S., juvenile mattress line and more
Mlily USA is turning up the volume on multiple fronts in 2021. For starters, parent company Healthcare Co. Ltd. plans to add two huge new production facilities in Arizona and South Carolina. The new plants will double production capacity, enabling the company to keep pace with rapidly growing demand for its foam and hybrid mattresses, adjustable bases, pillows and other sleep accessories.
In addition, the Knoxville, Tennessee-based producer wants to expand its presence on store floors. To attract new retailers, the company has doubled the size of its Las Vegas Market showroom and strengthened its assortment with a new line of youth bedding and other fresh products. In order to spur demand, it is ramping up a consumer advertising campaign aimed at building brand awareness.
It also recently opened its fifth U.S. warehouse. The facility in Andersonville, Tennessee, will provide delivery to retailers and direct-to-consumer drop-shipping for products made in the South Carolina factory. Mlily USA plans to add another warehouse on the East Coast later this year.
“This is an exciting time for our company,” says Stephen Chen, president of Mlily USA, who joined the company in 2014 after 25 years in the telecommunications industry. “Mlily is a true innovator and one of the most technologically advanced companies in the industry. These advancements give us the ability to provide a good night’s sleep to consumers and healthy profit margins for our retail partners — and should lead to even more robust growth in the United States in the coming years.”
Mlily USA’s goal is to double its revenue in each of the next three years, Chen says.
From machines to mattresses
Based in Rugao, China, Mlily USA’s parent company — Healthcare Co. Ltd. — opened its first factory in Asia in 2003. The company initially specialized in the production of foam cutting machines designed by its founder, James Ni. As Healthcare Co. Ltd. became more established in the sleep products industry, Ni saw an opportunity to expand the company’s footprint by offering a line of foam mattresses. In 2008, the Mlily sleep products brand was established, and in 2010, the company entered the U.S. market with Mlily USA.
In 2019, Healthcare Co. Ltd. opened a $50 million, 650,000-square-foot plant in Winnsboro, South Carolina. The plant employs a workforce of 250, producing the company’s full line of mattresses, as well as components such as foam and springs.
In January, the company took another big step in expanding U.S. production by opening a second manufacturing facility in Goodyear, Arizona. Like the plant in South Carolina, the new 644,000-square-foot facility in Arizona houses foam pouring, spring production and mattress manufacturing lines. Covers are imported from China, but Mlily plans to shift that production to its U.S. facilities later this year.
At full capacity, the Arizona plant is expected to employ 250 people. Operations began in the first quarter, producing 1,500 mattresses and toppers per day, with the capacity to manufacture 6,000 pieces per day.
“We are seeing significant growth both in our branded products and in our private-label contract business,” Chen says. “This factory gives us a first-class facility in the West to match our flagship factory in South Carolina so that we can seamlessly service our North American partners.”
When both plants are fully operational, Mlily USA’s entire line will be sourced in the United States, with the exception of adjustable bases. Plans call for those to continue to be sourced from Healthcare Co. Ltd.’s factory in Thailand until 2022, when the U.S. plants will add that capability.
Healthcare Co. Ltd. chose to establish production sites in both the eastern and western United States to support the company’s goal of delivering anywhere in the county within several days, Chen adds.
Two new factories on the way
AT A GLANCE
Mlily USA (The name Mlily is derived from Mandarin and means “Lily in a dream.”)
Knoxville, Tennessee, with production facilities in Arizona and South Carolina and a product development office in Los Angeles. New plants are opening in Arizona and South Carolina later this year.
A full line of memory foam and hybrid mattresses, as well as pillows, adjustable bases and other sleep accessories
Mlily USA’s parent company, Healthcare Co. Ltd., opened its first factory in China in 2003, producing foam cutting machinery for the bedding industry. In 2008, the Mlily mattress brand was established and, in 2010, the company formed Mlily USA. Healthcare Co. Ltd. operates factories in China, Serbia, Spain, Thailand and the United States, with a total of more than 7 million square feet of production worldwide.
Healthcare Co. Ltd. is a publicly owned company listed on the Shanghai Stock Exchange.
Because 2020 was a record year for sales, Mlily’s leadership feels confident about the steps it is taking to expand its U.S. production capacities by adding two more 500,000-square-foot plants, one in Rock Hill, South Carolina, and one in Arizona. These sites, expected to be operational by the second half of 2021, will enable Mlily to segment its production activities by product type. One plant in each region will be dedicated to branded Mlily mattresses, and the second plant in each region will focus on private-label beds.
Each plant also will be vertically integrated to produce the components that go into each bed type. The plant setups in the eastern and western United States will mirror each other to enhance productivity and efficiencies.
“Being totally vertical enables us to control the quality of everything that goes into our products,” Chen says. “We test every component ourselves. It also allows us to be more innovative, since we have the expertise to create our own unique spring and foam designs.”
In addition, producing its own components provides Mlily USA with cost advantages. “We’re not as dependent on outside suppliers,” Chen says. “With everything that’s been going on lately with regards to limited raw materials and supply shortages, we’ve been much less affected.”
Mlily USA also has upgraded its dealer interface to include direct ordering and enhanced inventory controls that allow retailers to see available product and track deliveries in real time. And the company continues to bolster its customer service department by adding more in-house representatives.
According to Mlily’s mission statement, the company is dedicated to “redefining how people sleep.”
“Science shows that a cooler room and body temperature deliver better, more restful sleep,” Chen says. “At Mlily, our mattresses and pillows are crafted with advanced foams designed to deliver a cooler sleep while wicking away moisture and fighting odors.”
Taking a science-based approach to product development, Mlily USA’s team of designers and engineers has created a collection of proprietary foams and sleep products that “provide great support, improve comfort and reduce motion transfer to offer a cooler and more restorative night’s sleep,” he says.
Mlily USA’s mattress line includes three core collections. The assortment starts with Dreamer, a promotional line retail priced below $399 for a queen size. This memory foam group is designed for sale by online merchants and brick-and-mortar retailers as a “loss leader and traffic builder,” Chen says.
The Essential line, priced from $499 to $1,499, serves the mainstream of the mattress market. It features a wide variety of memory foam and hybrid models in 8-, 10- and 12-inch heights.
Positioned at the upper end, from $1,499 to $3,499, is the flagship Mlily USA collection. A top seller in the line is Harmony Chill, a 13-inch memory foam mattress with phase-change management air cell technology and a cooling knit cover ($3,499). The mattress features seven layers of foam, including a layer of Mlily’s proprietary AdaptiFoam, an exclusive synthetic latex that delivers the breathability and support benefits of latex while being allergy-free.
Another strong seller in the Mlily USA collection is Powercool. Introduced in mid-2019, Powercool is a complete sleep system that combines an 11 1/2-inch hybrid mattress with an adjustable base that houses four built-in fans to channel air through the mattress. The system keeps air flowing continually through the cushioning layers and the pocketed coil innerspring unit. The comfort and support layers also are ventilated. The system, with adjustable base, is retail priced at $4,500 in queen size.
“Powercool has been very well-received by retailers and consumers,” Chen says. “It’s a game changer in its ability to deliver a cooler night’s sleep.”
New line for kids
At the Las Vegas Market in April, Mlily USA introduced its first collection of mattresses designed for the youth market. (See story on page 75.) Called Jama, the line features two medium-feel memory foam mattresses (including a gel model) with fun, washable covers and coordinating pillow and protectors.
For the launch of the line, the company is partnering with Special Spaces, a nonprofit that does room makeovers for children with cancer. A portion of every sale will go to the organization, which Mlily has supported for a number of years.
“The Special Spaces logo will be on every mattress as a way to spread the word about the important work this group does,” Chen says. “We have big expectations for this new line — it fills a niche that is underserved and growing.”
Chen adds that the Jama line was developed by Nairi Gharibian, head of design and research for Mlily USA. Gharibian joined Mlily in 2019 after 10 years as design manager and senior product designer with Munchkin, a maker of baby products.
At Las Vegas Market, Mlily USA exhibited in an expanded, 20,000-square-foot showroom. The additional space allowed the company to showcase nearly 30 mattresses and its complete line of pillows and adjustable beds, including two new bases introduced at the April market.
“Demand for our products continues to grow in the U.S., and as we expand our product offerings, we needed more room to showcase our brand capabilities,” Chen says. “Building on the look and feel we created with the last expansion in 2019, the new showroom also provides more meeting space for us to collaborate with customers in developing products that meet their needs.”
At the April market, Mlily USA also expanded its sleep accessories lineup with four new pillow collections. The new pillows incorporate Mlily’s proprietary foams and offer customization, cooling technologies and breathability. The new collections expand the company’s pillow assortment to more than 10 models.
Going forward, Mlily USA expects to continue expanding its base of distribution. The company currently does business with three key groups of customers: regional distributors, furniture store chains and leading online merchants. In the early years, the company worked exclusively with distributors. But, as sales have grown, it has established its own sales force to support both brick-and-mortar and online retailers in key markets, while maintaining its relationships with select distributors.
The combination of domestic manufacturing and substantial warehousing capabilities positions Mlily as a go-to bedding supplier for retailers seeking quick, efficient delivery, Chen says. The company’s logistics department offers retailers the option of direct delivery to consumers or delivery to the store for final fulfillment.
With a manufacturing presence in both the eastern and western United States, Chen says, Mlily USA can meet consumers’ immediate needs and mitigate long delivery times. Today, all of Mlily USA’s mattresses are roll packed to expedite shipping times and reduce costs.
“Our parent, Healthcare Co. Ltd., was at the forefront of the boxed bed trend and had been producing boxed beds since the mid-2000s for its private-label customers,” Chen says. “Since that time, we’ve really perfected the art of shipping mattresses in a box.”
Healthcare Co. Ltd. also was an early mover in boxed hybrid mattresses, which Mlily USA first brought to the market in 2009. “Our parent company pioneered the process of boxing these mattresses without damage by developing a specialized spring that would bounce back after being compressed,” Chen says.
Mlily’s strength in boxed bed constructions paid dividends last spring when the Covid-19 pandemic struck. As in-store sales plummeted and online sales soared, Mlily USA developed a new minimum advertised pricing policy that enabled retailers to begin selling the brand online for the first time.
“We’ve wanted to make sure we could protect the brand and our retailers,” Chen says about the decision not to allow the Mlily USA brand to be sold online in the past. “In the early years, online selling was the Wild West as far as pricing — and that led to a lot of confusion and frustration for both consumers and retailers.”
The MAP program includes the company’s branded hybrid and foam mattresses. Retailers have the option of having Mlily USA drop-ship purchases directly to consumers or have them sent to stores for delivery to the consumer. Mlily USA handles the backend inventory and direct-to-consumer delivery from its factory in South Carolina.
“We can manage all the logistics for our retailers,” Chen says. “They sell it online through their store’s website, and we take care of the rest.”
Mlily USA has contracted with a third party to monitor online pricing and ensure fairness, he adds.
Building a brand
While Mlily USA has opened the doors to more online sales, the company also is expanding its efforts to drive traffic to retail stores. For the Presidents Day holiday in early 2020, Mlily USA launched its first national radio campaign. The 30-second spots aired in seven cities and reached 16 million listeners. The spots promoted Mlily USA mattresses as the path to a better night’s sleep, offered a promotion and, depending on the market, mentioned specific retail partners. Some of the ads encouraged consumers to visit Mlily USA’s dealer locator on its website.
“Radio is a terrific medium to talk about sleep because, in many cases, consumers are in their cars driving to work in the morning or coming home in the evening when they are tired and sensitive to hearing messages about sleep and relaxation,” Chen says.
This year, Mlily USA also will be updating its website, MlilyUSA.com, to make it more consumer-friendly, Chen says. “We will still have a portal for our retail partners, but the site will be expanded to include more information about our products and the importance of quality sleep,” he says. To build awareness of the site and the brand, Mlily USA will expand its social media efforts with “creative contests and partnerships,” he adds.
In March, Mlily USA kicked off these efforts with a “Show Us Your Mug” social media contest in partnership with coffee brand Melitta. Contestants posted photos of themselves enjoying their morning coffee, and the winner received an Mlily mattress of his or her choice, a year’s supply of Melitta coffee and a mug.
A global footprint
The Mlily brand also has a strong and growing presence in a wide variety of key markets beyond the United States. Mlily-branded products are sold in 72 countries and are made at manufacturing facilities in China, Serbia, Spain and Thailand, as well as in the United States.
In 2020, Healthcare Co. Ltd. expanded into retail in the United States with the purchase of the San Diego, California-based Mor Furniture for Less chain. The Mor Furniture chain operates 35 stores in Arizona, California, Idaho, Nevada, New Mexico and Washington, selling an assortment of leading bedding brands, including Mlily. In China, Healthcare Co. Ltd. operates its own chain of more than 400 retail stores that sell Mlily-branded products.
As the Mlily brand has expanded in markets from Japan and Australia to France and the United Kingdom, Mlily and its sister companies, such as Mlily Mattress UK, have looked for creative ways to build brand awareness among both retailers and consumers, Chen says. A key step was taken in 2016, when the Mlily brand entered into a global partnership as the official mattress and pillow partner for the British soccer team Manchester United, one of the most popular and successful sports organizations in the world. As part of the deal, Mlily Mattress UK provides the team’s training complex with mattresses and other sleep products. Specially designed Dream+ mattresses also have been placed in the homes of the players and coaching staff.
“In Britain, Mlily works closely with the team at Manchester United to test and improve our products,” Chen says. “The benefits of this program not only help the players at United but everyone who sleeps on a Mlily mattress.” And because Manchester United has such strong recognition worldwide, the partnership pays dividends for the brand in markets outside the United Kingdom, he adds.
Mlily also has an affiliation with Dr. Robin Thorpe, the former sleep doctor to the team who worked with the club for about 10 years. Thorpe has since trained Olympic athletes and worked with the NBA’s Phoenix Suns on how its players can improve their performance through better sleep. He currently is a sports performance consultant with Intel.