Simmons Bed Surpasses 300 Billion Won in Sales After 2 Years, Showing Unstoppable Momentum

"Premium Bed Synonym" Simmons Shows Rising Trend... "Expecting Operating Profit Improvement"

[Asia Economy Reporter Kim Jong-hwa] Simmons Bed surpassed 300 billion KRW in sales just two years after exceeding 200 billion KRW. This marks the shortest period in the industry to move from the 200 billion KRW range to the 300 billion KRW range.

As the domestic bed market polarizes into 'premium' and 'low-cost' segments, Simmons has solidified its position as a 'category killer' brand for wedding furniture and as the 'synonym for premium beds.'

Simmons Bed announced on the 14th that it recorded sales of 305.4 billion KRW last year, a 12% increase compared to 271.5 billion KRW the previous year. Simmons first surpassed 200 billion KRW in sales in 2019, and its sales have increased by 101.6 billion KRW over the past two years. Last year's operating profit margin was 6.0%, maintaining a similar level to 5.4% in 2020.

Continued 'Aggressive' Investment Despite COVID-19 Situation

The reason for the modest growth in operating profit is the aggressive investment that did not stop even during the global COVID-19 pandemic over the past three years. During this period, Simmons shifted completely from the 'B2B' dealership supply method, which was mainly used by existing living brands in furniture districts, to a 'D2C (Direct to Customer)' model that emphasizes consumer brand experience. This retail system is the distribution method pursued by luxury brands worldwide, and Nike has recently fully transformed into a retail system as well.

To this end, Simmons opened 21 Simmons Mansions last year, continuing to relocate stores to premium commercial areas, spending 11.7 billion KRW on rent alone. This is about a 40% increase compared to the previous year.

Simmons Mansion is a retail store where Simmons headquarters supports 100% of related costs such as interior, product display, and promotion to consignment sellers. Moving away from the aging traditional furniture district commercial areas, Simmons Mansions have been relocated to major key commercial areas with large electronics stores like Samsung Electronics and LG Electronics, as well as imported car showrooms. Other major bed brands are also showing movements to relocate stores following Simmons' relocation path.

In this process, the total number of stores in 2021 decreased by about 100 compared to 2019, when the transition to the retail system began, but the average monthly sales per store in 2021 reached about 180 million KRW, nearly three times higher than the 60 million KRW average monthly sales per store at the end of 2018, significantly improving store efficiency.

The headquarters fully bears the sales commissions paid to consignment sellers and interest fees for the subscription economy membership service 'Simmons Pay,' which is actively expanding in directly operated stores, spending 81.2 billion KRW on commissions last year. This is more than a 20% increase compared to the previous year.

643 Employees... Average Age 34

Despite the adverse conditions of COVID-19, aggressive human investment continued, increasing the number of employees to 643 last year. This is an increase of more than 100 compared to 522 in 2020 and more than 200 compared to 417 in 2019, when the D2C transition began.

Notably, most of the newly hired personnel are from the MZ generation, which has lowered the average age of all Simmons employees to 34, and the industry views this as securing future growth engines.

Kim Sung-jun, Executive Director of Simmons Strategic Planning Division, said, "Over the past three years, Simmons has secured momentum to transition to a consumer brand experience-centered 'D2C' retail system that covers the entire process from accessing product information and purchasing to installing the bed at home. Now that the distribution innovation project transitioning to D2C is complete, we can expect improvements in operating profit along with sales growth."