Tempur-Pedic plans lower-priced line, targeting $1,499 for queen set
First mattresses under $2,000 will double size of addressable market, says CEO
David Perry -- Furniture Today, January 26, 2012
LEXINGTON, Ky. — Memory foam bedding leader Tempur-Pedic is bidding to dramatically expand its business with the introduction of a new line targeting the $1,499 price point.
The three-bed line, to be introduced at the Las Vegas Market next week, marks a $500 step down in price points for Tempur-Pedic, thus significantly expanding the company's consumer reach, officials said.
The industry has been buzzing in recent weeks about the possibility that Tempur-Pedic would introduce a lower-priced memory foam line.
Tempur-Pedic CEO Mark Sarvary revealed an outline of the new line in his comments to analysts earlier this week when the company released its latest quarterly results, which represented another strong performance for Tempur-Pedic.
"There are consumer segments that we do not currently address, and one of our four initiatives is to use research and development to ensure there is a Tempur mattress and pillow that appeals to everyone," Sarvary said. "So as we did with the Cloud Collection, we've identified another major opportunity to expand our appeal and meaningfully grow our business. The $1,000 to $2,000 price tag represents a very large market segment that we currently do not address in a meaningful way."
Sarvary said that segment "has the same dollar value as all the segments above $2,000 added together. So I'm excited to announce that we will be introducing a three-bed line, with varying feels, priced at $1,499 for a queen set next week at the Las Vegas bedding show. The introduction of this line effectively doubles the size of our addressable market."
He said Tempur-Pedic spent two years developing the collection, and he called it "the most researched product we have ever launched. It is both consumer preferred to the competitive set and vastly incremental to our existing product portfolio."
Initial retail feedback on the line "has been very positive," Sarvary added. He said Tempur-Pedic will reveal more details of the line in Las Vegas next week.
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