Startup online mattress seller Tuft & Needle will be acquired by old-line mattress company Serta Simmons Bedding for an undisclosed sum, according to various media reports, as Serta looks to bolster its digital presence and gain back share grabbed by new online players.
Companies like Tuft & Needle, Casper, Purple and Leesa Sleep have gained about 20% of the $3 billion mattress market in recent years, according to Forbes. Selling direct to customer at massive discounts to traditional firms, they have been a disruptive force in the digital age. Many of them offer free in-home trials of their product.
Serta Simmons, with $3 billion in revenue, said it is the largest mattress supplier in North America; Beautyrest is its other major brand. It was acquired in 2012 by private equity firm Advent International for a reported $3 billion.
The deal will give Tuft & Needle access to a retail channel that includes 10,000 stores in 150 countries, as well as major hotel chains including Hilton, Marriott and Best Western. It currently sells through Crate & Barrell as well as three of its own physical stores, and on Amazon.com.
“The merger will change the industry in a significant way,” Serta Simmons CEO Michael Traub told Forbes. “We will be able to serve consumers unmatched both online and in-store.”
Meanwhile the mattress and bedding market has not been immune to the overall challenges in the retail industry, as retailer Mattress Firm is considering filing for bankruptcy protection.
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