Done Deal: Serta merges with retail up-start
The merger between a legacy mattress company and a fast-growing, direct-to-consumer brand has been completed.
Serta Simmons Bedding and Tuft & Needle have finalized their previously announced merger. Tuft & Needle’s direct-to-consumer features will be integrated across SSB’s household name brands, which include Serta, Beautyrest, Simmons and Tomorrow.
With this merger, “customer-centric innovations will become the standard” for the entire SSB house of brands, the company said, and value-add services will be developed and piloted for its key retail partners. By accelerating its direct-to-consumer reach and capabilities, SSB said it “will continue to lead in transforming the industry to one that is customer focused.”
Tuft & Needle co-founders JT Marino and Daehee Park have been appointed to expanded roles within SSB. Marino was named chief strategy officer; Park was appointed chief growth officer. Both report to the CEO of SSB, Michael Traub.
“We are excited to merge with Tuft & Needle to create the number one customer-centric sleep company with the broadest reach, best-in-class manufacturing and over 150 years of experience,” said Traub.
The merger occurs as Tuft & Needle and other online upstarts such as Casper and Leesa have taken share away from Serta and other traditional mattress companies by offering generous return policies and free, bed-in-a-box deliveries. Tuft & Needle, which was founded in 2012, sells mattresses, bedding and bed furniture online. Similar to Casper, it has also entered the physical space. It has stores in Scottsdale and Gilbert, Arizona, and Seattle, with a location due to open later this year in Kansas City.
“We have opened a new chapter in the mattress industry,” said Marino. “Over the coming months, we will begin to showcase to our customers and retail partners key changes in how we operate and go to market. Also, we will offer retail partners new services and tools to support their success in the evolving market. SSB is clearly taking a strong industry-leading position by recognizing the future as delivering best-in-class experiences for customers wherever they choose to shop.”
Destination Maternity refinances credit agreement
The nation’s largest maternity store retailer has gotten a reprieve on its credit facility.
On Wednesday, the company announced that it signed a commitment letter with Bank of America for a new five-year, $76 million facility. The new deal, which will refinance and replace the company’s existing $50 million asset-based loan and $25 million term loan, will result in annual interest savings of approximately $1.2 million and $1.4 million.
The closing of the new Bank of America facility is subject to customary conditions precedent, including due diligence and the negotiation and execution of final documentation. The senior secured facilities are expected to be entered into, and funded by the end of the year.
“We very much welcome this attractive refinancing package from Bank of America,” said Marla Ryan, the CEO of Destination Maternity. “The new facility is a testament to the transformation at Destination Maternity and puts our Company on a firm financial foundation.”
Bed Bath & Beyond Q2 misses Street
Strong digital growth was once again offset by declining store sales during Bed Bath & Beyond’s second quarter.
The home goods retailer reported net earnings of $48.6 million, or 36 cents a share, for the quarter. Analysts had expected earnings of 50 cents per share. Net earnings for the year-ago period were from $94.2 million, or 67 cents per share.
Net sales were approximately $2.9 billion. In addition to being flat compared to the prior year, they fell just below analysts’ expectations of $2.96 billion. Same-store sales fell 0.6%, despite strong sales growth from the company’s digital channels. Sales from stores declined in the mid-single-digit percentage range.
During the fiscal second quarter, the company opened one Bed Bath & Beyond store and two World Market stores.
As of September 1, 2018, the company had a total of 1,560 stores, including 1,018 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada; 281 stores under the names of World Market, Cost Plus World Market or Cost Plus; 121 buybuy Baby stores; 83 stores under the names Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, and 57 stores under the names Harmon, Harmon Face Values or Face Values.