Investors Put down Cash For growing mattress company

Once sleepy company to broadcast product at seven sockets

Mattress maker Select Comfort Corp. expects sales to climb from $600,000 in 1991 to $6 million annually, because of an infusion of cash and management expertise by local venture capitalists.

 The Brooklyn Park-based maker, that makes a Exceptional air Support futon mattress, has been changed from a mom-and-pop performance into a company that will have seven retail outlets available nationally by the end of the year.

 Business founder Bob Walker, who started the company in 1985 after Spending 12 years studying his product, has invented what he believes to be the next revolutionary step in bed. https://www.minds.com/bestfutonmattressreviews

 "I was curious that all of the mattress firms knew how to make a futon Mattress, however, nobody thought about the folks with back or sleep problems which were using it. I thought it might be novel to generate a mattress to fulfill the people using it," Walker said.

 To make it possible for his brand new product to compete at the bedding Market, Walker knew he needed capital and business experience. After being turned off by numerous investors, last June he discovered that a consortium of venture capitalists willing to invest in his concept and business.

 Together, a triumvirate of venture capital firms have spent Over $3 million thus far in Select Comfort. The group comprises St. Paul Venture Capital Inc., St. Paul; Cherry Tree Ventures, Bloomington; and Consumer Venture Partners, Greenwich, Conn..

 "I believe this business has enormous capacity; that is easy To see. Nonetheless, it's going to take a good deal of work," said Pat Hopf, president of St. Paul Venture Capital Inc. "We are trying to say that the whole mattress industry has the wrong product and we're staying far from the present distribution system. It is like saying we are going to construct all electrical cars without the help of the major car manufacturers."

 Walker's mattresses utilize Atmosphere rather than springs, water or foam to cushion and support the sleeping body. A flexible pressure system can control the amount of air in each of the mattress' air chambers, enabling users to vary the firmness. Consumers simply flick a switch to determine how hard or soft they want the futon mattress to feel. From the larger versions, two different air chambers are made into the mattress to couples with different tastes in mattress firmness. The mattresses retail from $700 to $1,100.

 "There is no reason why Select Comfort can not be a contender In the |mattress~ market, which is about a $5 billion annual business in retail sales," said Nancy Butler, senior vice president of International Sleep Products Association in Alexandria, Va.

"It will depend a lot on how it's promoted and advertised because it is relatively new and none of the big, national brand companies are involved with air beds. As yet, it doesn't have some of the advertising to drive it into a considerable product category. It has a way to go."

 Before the venture capitalists took over company management, Walker was hoping to sell his mattresses through department stores and other retail outlets. The company had six employees and about $600,000 in sales in 1991. Nowadays, there are 56 employees, including a brand new management team, and a significant change in marketing strategy. https://www.flickr.com/people/futonadvisorszone/

Walker, who's chairman of Select Comfort, said the business is selling 500 beds per month and expects to do $6 million in earnings this year.

 Since November, Select Comfort has marketed its product Nationwide through direct response advertisements, where ads are placed in magazines and papers asking interested buyers to call for a free video and brochure. The mattresses include a 90-day return policy, and can easily be shipped by UPS since they're inflatable.

 Recognizing that most buyers Will Need to test a product before making Such a massive investment, Select Comfort opened three retail outlets during the previous several months in three area malls -- Ridgedale, Southdale and Rosedale. The company is about to open its fourth store in the Mall of America. Select Comfort also plans to open three additional outlets on the East and West coasts later this season. "We will open as many as we can, but we first have to refine our stores," Hopf stated.

 Two of those mall shops are kiosk structures set at the mall's Centre of visitors, while in Southdale and Mall of America, Select Comfort has its own 450-square-foot stores.

 Hopf said shop sales are reaping about $1,000 a square foot on an annualized basis. Most retailers are comfy at $300 a square foot in sales, he added. Hopf, who invests only in retail concerns, stated this shop concept is a breeze. There's only 1 product type, there is no stock piling up in the rear of shops, and they have their own distribution platform.

 However he admits that buying brand new product is one long uphill Climb, particularly when the public thinks of air beds as floatable swimming rafts or cheap camping equipment. He is expecting the recent interest in air-pumped tennis shoes or baseball gloves can sway interested buyers, that are most likely to be more age 40 and over.

 "We are not attempting to make a new market here. The Marketplace Size has been established. We're just trying to get 5% of the total giant business," Hopf said.

 Roy Unger, former president of Certa Inc., the Chicago-based mattress manufacturer that's second in market share, thinks Select Comfort is on the ideal track. "They're onto a good idea and they are marketing it in a smart way," said Unger, who is spent 43 years in the company. "By going directly to the consumer, they have the opportunity to tell their story. The mattress requires some explaining." https://angel.co/futon-advisors-zone