Serta Simmons Bedding, the world’s leading producer of mattresses and sleep experiences, will be merging with direct-to-consumer mattress company Tuft & Needle.
Serta executives told CNBC about the merger in an interview on August 21st. Serta said it will seek to take advantage of combining Tuft & Needle’s e-commerce infrastructure and capabilities with Serta Simmons’ retail reach.
This deal represents one of the first to combine a legacy mattress company with the upstart brands.
Tuft & Needle, which generated $170 million in sales in 201, offer 100-night trials for free. The company was founded in 2012 by JT Marino and Daehee Park and sells mattresses, bedding and bed furniture. The company’s mattresses sell under the brand names T&N and Mint and can be found on Amazon and Crate & Barrel.
Serta Simmons CEO Michael Traub stated, “The merger will change the industry in a significant way. We will be able to serve consumers unmatched both online and in-store.”
“We have realized that over the past few years, the direct-to-consumer [business] has grown drastically,” said Traub.
“Combining [Serta’s] nearly 150-year legacy and leadership in product innovation with Tuft & Needle’s expertise in delivering a best-in-class consumer experience, this merger will greatly accelerate our growth and innovation in the direct-to-consumer segment and significantly enhance our e-commerce capabilities across brands. Together, we have a clear path to transform the consumer experience at scale as well as the future of the industry,” he added.
“Consumers are shifting to finding retail stores on their phones,” remarked Marino. “That’s something we’ve mastered — how to drive traffic into those retail stores. It’s probably the most important thing to our retail partners that they haven’t figured out.”
“There’s clearly been disruption in the mattress industry,” wrote Tuft & Needle co-founders JT Marino and Daehee Park in a statement on the retailer’s website.
“We’ve architected and catalyzed this change in the market together—with our team and with our customers. As of today, through our merger with the largest sleep company in the world, we’ve taken the next step in fundamentally changing the industry.”
“It is a great combined company,” said Traub. “We are creating value for customers, consumers and ultimately investors.”
The terms of the deal have not been disclosed.
Marino and Park will report to Traub and join the company’s leadership team.