Canada NewsNews

Sleep Country’s CEO seeks acquisitions as revenue soars

The mattress and bed retailer recently recorded the highest revenue increase in its 28-year history

Article content

Sleep Country Canada Holdings Inc. is looking to expand its accessory business through mergers and acquisitions after delivering record first-quarter results.

Advertisement 2

Story continues below

Article content

“That’s going to be definitely on our radar,” chief executive Stewart Schaefer said in an interview with the Financial Post’s Larysa Harapyn.

According to Schaefer, the company has a 35- to 40-per-cent market share in mattresses, but only an eight- to 10-per-cent market share in accessories. The accessory business is “not as high as we want it to be” and has “lots of room to grow,” he said.

Earlier this month, Sleep Country recorded the highest revenue increase in its 28-year history. The company’s earnings increased by $24 million from $183 million in the first quarter of 2021 to $207 million in the first quarter of 2022.

“Our strong performance reinforces the resilience of our sleep ecosystem, our proactive measures and our best-in-class team to provide a seamless customer experience across all our brands and channels,” Schaefer said in a press release.

Advertisement 3

Story continues below

Article content

One reason the Canadian mattress retailer is doing so well is that it’s managed to stay on top of inventory. Earlier this year, trucker protests shut down the key Ambassador Bridge to the United States, exacerbating widespread supply disruptions dating to the start of the pandemic. Sleep Country avoided some of the pain that other companies suffered because 80 per cent of its products are manufactured in Canada. Having product in stock gave it a competitive advantage over other retailers.

“Inventory is the new gold,” said Schaefer.

Inventory is the new gold

Stewart Schaefer

Another factor is that people are spending more on sleep. Consumers took a greater interest in health and well-being during the pandemic, Schaefer said. As a result, customers started purchasing better quality bedding and increasing their basket sizes.

Advertisement 4

Story continues below

Article content

Consumers are also shifting away from e-commerce as the world reopens from COVID-19 restrictions. “The resurgence that we’re seeing in our stores has been terrific,” said Schaefer.

Customers are pairing online shopping with in-store shopping by doing a lot of research before going into stores.

“The journey may start on your phone, involve the store and then may be completed on your phone when you get back in the car,” said Schaefer. “There’s no question that retailers need to be omni-channel more than ever before.”

Sleep Country hasn’t been immune to all the challenges facing the economy. This March, food inflation rose by 8.7 per cent — the fastest rate in 13 years. At the same time, gasoline prices have increased consistently since the middle of 2020.

Advertisement 5

Story continues below

Article content

Schaefer said consumers on the lower end have been more price sensitive because they are the most affected by soaring gas prices and grocery bills. But, Sleep Country has had the pricing power to pass on some of the inflationary costs to consumers in the mid to high end.

He remains optimistic despite the disruptions. “We haven’t yet seen a pullback from the consumer,” Schaefer said. “Our consumer is still strong, and the balance sheet seems to be OK.”

  1. Lactalis informed Canadian retailers in November that it would be raising prices by as much as 15 per cent. It owns the Lactantia and Beatrice brands, among others, in Canada.

    Billionaire boss of dairy giant Lactalis says his company is facing inflation like he’s ‘never seen’

  2. Aritzia Inc earnings beat expectations.

    Aritzia founder Brian Hill hands CEO duties to Jennifer Wong, stays as executive chair

  3. Shopify said it lost $1.5 billion in the first quarter.

    Shopify shares plunge as Canada’s tech champion reports big quarterly loss

Sleep Country has been expanding its brick-and-mortar stores along with its digital footprint.

Advertisement 6

Story continues below

Article content

The retailer is working on launching a new version of its store with an expanded customer experience in the next few months. “We’re always trying to adapt our strategy around our customers’ habits,” said Schaefer.

The company also expanded in tertiary markets including Thornhill, Ont., while construction in big cities such as Toronto, Montreal and Vancouver, was closed.

With expansion comes hiring. Schaefer said he is bringing people back to the office on May 24 on a hybrid schedule and hoping to entice workers with food trucks, prizes and gifts, and health and well-being credits.

“It’s always about trying to improve on the associate’s experience to make this the best place to work,” said Schaefer. “That’s a very important part of our culture.”

• Email: [email protected]


Story continues below


Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

View Article Origin Here

Related Articles

Back to top button