***** MATTRESS STORES *****
***** MATTRESS STORES *****
Just a quick observation…
I don’t know about you guys, but it seems to me that every “crappy” South Florida strip center now has a MATTRESS STORE in it.
Now…I know that in recent years fancy-schmantzy self-adjusting mattresses have become quite the “rage”—but something tells me, that “mattresses” just like “upscale” fast food burger–self serve yogurt–cupcakes–coal oven pizza joints—definitely got a musical chairs game going on–and it ain’t gonna end well for most of the retail-mattress joints.
I don’t know about you, but it just seems to me–that in a real weak economy “buying” a new mattress can’t be on too many folks’ “must buy” lists. It would also seem to me that all of these mattress stores indicate that landlords are having trouble finding shall we say-stronger tenants to fill those vacancies.
Just some observations.
jeff, take a a look at tempur pedic (TPX) they put out earnings today and stock is 23.03 down 20.64 so far. sales are way off.
i agree with you all of these mattress stores make no sense.
i have the same bed 20 years and love it. i would be lost not sleeping in the old bed with all of the lumps etc.
Look at the price these days! Absolutely insane!
All of those mattress stores should be telling everyone that S Fl. landlords are having huge problems getting good tenants. What’s it take capitalwise to open a mattress store? Not much!
Just ask yourself, when was the last time you bought a new mattress?
Amazing, my wife and I just last Sunday commented to each other as we drove N on Fed Hwy from Aventura to Pompano how many mattress stores there were. All different names and they are all in huge spaces. No way that so many stores are needed. Doesnt make any sense for these type of stores tobe in such demand. We were thinking how many sales could any one store even make in any given day? Not many.
Unlike a burger or yogurt no way they buying a mattress is an impulse buy.
Most of these stores are going to fail.
When we were talking we compared them to Halloween stores that pop up just before the holiday and then disappear.
By the way whats with all of these fireworks stores. Thats another business in strup centers that dont make any sense.
Mattress stores usually start to pop up when the trend in real estate shifts to rentals.
Their start up cost is virtually ZERO, a dozen cheap beds and 1 or 2 sales people paid commission.
Their inventory ships from a Coop’ed warehouse, and is delivered for a fee from an independent trucker.
Their markup is generally 3 times cost. With aggressive sales at double cost.
This is a business that generates moderate income with strong income coming from owning multiple units.
The risk is probably the lowest of any retail store.
kidding…thanks as always Jeff!
TPX is currently $22.51 that’s dow $21.16 for the day. Sales must have collapsed.
Who in their right mind needs to spend all kinds of money on a hi tech mattress in this economy? Not me for sure.
People who come from other countries and want to get residency here are required by the feds to have a business going. This is one way they do it.
a mattress store in a center tells me the landlord is sucking wind for tenants.
Just wanted to chime in here…loads of ridiculous claims being made that made me laugh. Especially the “zero start up cost” one. Hilarious.
I’ve been in the industry for a little over 10 years. Most major vendors will like to see you with at least $75,000 of start up capital to work with before they’ll sign a distribution agreement with you. Good luck signing with a national manufacturer with “zero” capital. (Serta, Sealy, Simmons, etc.) You certainly won’t be able to carry Tempur-Pedic.
You’ll need to be able to lease a warehouse first, so that you can store inventory. You’ll need to purchase a certain amount of inventory to put in your warehouse. You could probably get going with about 30K initially, and some vendors will work with you and ship on a 90 day credit depending on different circumstances.
Not to mention you’ll have to hire GREAT drivers and a warehouse crew, along with salesmen with excellent customer service skills if you want to survive. You’ll be going up against some extraordinarily well funded Goliaths with enormous budgets.
And retailing for 3x cost? lol, no. Just…no. Selling for 2x cost is considered excellent in most markets, phenomenal in hyper-competitive ones. Keep in mind your credit card fees, commissions, rent payments, utilities, insurance fees, delivery fees, etc…will all come from your gross profit dollars. They add up like you wouldn’t believe.
It’s a very competitive industry. Cutthroat at both the manufacturing and retail level. Many independent retailers don’t survive — even with these allegedly “high” markups, (which incidentally are often lower than many other industries. A Starbucks latte has a higher margin than just about any mattress ever will.)
Hope this clears things up for anyone interested.
Great reply Sean.
You guys must not realize the margin in mattresses. I’ve sold mattresses for 3 years and last year 2012 my store sold $663,000 in mattresses. 35% being profit. Which is about 235,000 just in profit for the year. There are about 6 other competetor mattress stores in a 2 mile area and I’m sure everyone is making money. A mattress is a NECCESSITY ppl NEED them. Ppl don’t need beemers and flat screen TVs. Also you spend one third of your life on a mattress. It’s definately a great business to invest in
THANK YOU JAMES 🙂
James you are completely wrong. You are obviously working for a big chain and going off the cost in your system. The cost is boosted a lot to make you believe your only at a 35% margin. If you were the owner would you tell your employees the true cost especially at a revolving door company? No way Jose. You were most likely around a 55% margin.
Great information Sean.
I’m rather on the short side. Does that matter when picking a mattress size?
Very interesting info Sean! Makes sense though, even though these mattress stores are popping up everywhere, the mattress brands want to make sure the owner has enough $$ to stay open a while…looks bad if stores are always opening and closing.
ı couldnt belive the margin. ı am the owner of mattress company which is called Ergo. we have been producing mattress since 1991 in Turkey. usa mattress are so expensive. ı wish ı live in Usa.
Thank God it’s 2016. We have the internet and you can get a mattress online and shipped to you in a box and it is better and cheaper than all that crap that was sold for all those years. And the best part is that you dont have to have some sleaze ball sales person lying to you.