Continued Differentiation with Vegan Mattresses and More
"We Will Not Raise Product Prices This Year"
Simmons, the number one company in the bed industry, has broken through the recession and achieved its highest-ever performance.
On the 24th, Simmons announced that its sales last year rose 5% compared to the previous year to 329.5 billion KRW, setting a record for the highest sales ever. Operating profit jumped 65% from the previous year to 52.7 billion KRW.
This performance by Simmons is analyzed to be supported by its dominant position in the premium mattress market, which is close to a monopoly, and its multi-brand strategy led by the high-end vegan mattress N32.
Simmons holds about 90% market share in the supply of mattresses to major 5-star hotels in Korea. Its top-tier lineup, 'Beautyrest Black,' is recording an annual growth rate of about 20%, further solidifying its position in the premium market.
In the case of N32, its influence in the premium foam mattress market is growing stronger. The launch of pet mattresses, which were the first in the industry to obtain the ‘3 Major Pet Safety Certifications,’ and the expansion into the pet supplies market are also driving growth through business diversification.
Last year, Simmons spent 1.25 billion KRW on research and development (R&D). The ‘Vanadium Pocket Spring,’ which is practically semi-permanent in use, vegan mattresses made from biodegradable materials minimizing environmental impact, and pet mattresses produced using the same raw materials and manufacturing methods as human beds are all results of this R&D.
Simmons’ operating profit margin last year was 16%, up 6 percentage points (p) from the previous year. Simmons explained that the increase in operating profit margin was the result of structural improvements through an emergency management system operated throughout the past year.
Another area Simmons has focused on as much as sales is Environmental, Social, and Governance (ESG) management. One example is the patent for a fire-retardant mattress manufacturing method, which was disclosed in January last year.
In major advanced countries such as the United States, Canada, and the United Kingdom, laws require that only fire-retardant mattresses that prevent the 'flashover' phenomenon?where the entire indoor space is engulfed in flames during a fire?be distributed, securing evacuation time for occupants. Other bed brands also agreed that manufacturing and distributing fire-retardant mattresses ultimately benefits society and consumers, so they made the related patent available for anyone to use.
During last year’s 'Timon Unsettled Payment' incident, Simmons completed product deliveries despite the risk of about 1.4 billion KRW in unpaid receivables from Timon, absorbing the loss to minimize the damage passed on to consumers.
Additionally, Simmons ran the industry’s first ESG bed project, ‘Beautyrest 1925,’ where 5% of the consumer price from each product sold is accumulated as a remodeling fund for the Samsung Seoul Hospital Pediatric and Adolescent Center. This project achieved sales of over 3,000 units and raised more than 600 million KRW in donations.
Simmons explained, “This is a representative ESG branding case that well demonstrates how a company earns money not by ‘how much’ but by ‘how’?raising awareness of the reality of pediatric and adolescent care in Korea and encouraging donations through consumer purchases.” The cumulative donations delivered to pediatric and adolescent patients at Samsung Seoul Hospital from 2020 to this year have reached 1.8 billion KRW. Simmons has also continued various social contribution activities such as the ‘Farmers Market’ supporting local farms in Icheon, Gyeonggi Province, where Simmons’ headquarters is located.
Jung-ho Ahn, CEO of Simmons, said, “We have focused more on technological innovation, which is the essence of a company, and also tried to fulfill our social responsibilities. Especially this year, as it is expected to be particularly difficult due to unstable international situations and inflation, we have decided to freeze product prices.”
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