TORONTO — The head of Sleep Country Canada hopes its new bed-in-a-box e-commerce business will appeal to tech-savvy customers and those who live too far to visit its stores.
But CEO David Friesema said its latest foray doesn’t mean the company has plans to abandon its showroom business model any time soon.
“In the mattress industry, the majority of customers still want to buy in the store,” Friesema said in an interview Wednesday following Sleep Country’s quarterly conference call with analysts.
“It’s a very tactile purchase. They want to know what they’re going to be spending a third of their life on.”
Compared to Casper, Endy and Leesa, which launched two to four years ago and also sell a bed-in-a-box product that can be delivered, Sleep Country (TSX:ZZZ) has been slow to enter the e-commerce space.
Sleep Country went online this month with its e-commerce website, where customers can buy its $995 Bloom mattress and accessories such as bedding and pillows. It doesn’t plan on expanding its online offering to its other mattresses at this time.
“This is all new to us, so this is just a possible increase to us,” Friesema said.
“Do I view them as a threat? I view them as a good competitor just like I view other competitors.”
He said what sets Sleep Country apart in an industry he estimates to be worth $1.5 billion to $2 billion is that it sells a variety of mattresses, while its rivals only offer one.
Friesema said the company remains focused on expanding its presence and renovating its existing stores. There are plans to open between eight to 12 new locations a year, he said.
Sleep Country reported its first quarter earnings after markets closed Tuesday, showing a year-over-year rise in net income from operations of 40.6 per cent to $10.3 million in the three-month period ending March 31.
Revenue increased 15.8 per cent to $124.3 million while same-store sales, an important metric in retail, were up 11.9 per cent.
Sleep Country went public in July 2015. It had originally been listed on the Toronto Stock Exchange as an income trust from 2003 to 2008, when it was bought out for $356 million by Birch Hill Equity Partners and Westerkirk Capital.
Founded in 1994, the company owns and operates 237 stores in Canada under its own name and the Dormez-Vous? banner as well as 17 distribution centres.