It took Mattress Firm Inc. 26 years to open its 1,000th store.
The Houston-based company opened 1,000 stores in 2014 alone.
The company saw a 91 percent growth in net sales from the previous year and is continuing a rapid expansion across the United States.
One key player in the growth of Mattress Firm is real estate and development veteran Bruce Levy.
Levy admits that prior to joining the Mattress Firm team, he had his doubts about whether the mattress industry could ever become a national player. However, after his first interview, Levy was dazzled by the presentation he saw. “The president and CEO showed me what their plans were for the company,” he says. “I came back to my wife and said, ‘Oh my God, these guys have it figured out.’”
He already had high rollout real estate experience from his time spent at Blockbuster, Office Depot, and PETCO. Levy made sure to bring this knowledge to the Mattress Firm team before even being officially hired. “At the time, Mattress Firm was entering into the Florida market,” Levy says. “I plotted out the company’s stores and let them know what my honest thoughts were. There were a few moves that weren’t the best as far as acquisitions go. Luckily, they appreciated my honesty.”
When Levy joined the team in 2008, the economy was in the midst of the recession. Despite what most considered inopportune timing for growth, Levy and the Mattress Firm board of directors knew it was the time to strike. “The first play we did was respond on the marketplace and immediately negotiate rent reductions,” Levy says. The power play resulted in an estimated $30 million saved. “[The board of directors] knew the recession wasn’t going to last forever, so while everyone else was closing up shop, we said, ‘Now is the time to lock in all the great real estate.’”
A Well-Oiled Machine
Despite Levy’s experience with large companies, even he found Mattress Firm’s speedy process when opening a new location remarkable. Previously, Levy managed an average of 40 to 50 people. “At that point, I was an HR person and not working with real estate,” he says. “As a developer, I had this hunger to reach out and touch the actual real estate. The reality was that the brokers had as much knowledge as me. So, I finally said, ‘The real play is that if we have a group that allows you to make a decision in the field and execute on it, I can basically be the walking committee.’”
Another pro about working in the world of mattresses is his team’s thorough knowledge of the industry. The Mattress Firm real estate committee can knock out 60 deals in three to four hours. “The conversation is massively quick and to the point,” Levy says. “The approval rates are rapid, which is why our growth rates are so rapid.”
Levy is traveling most of the year, looking for the next best location. To meet Mattress Firm’s 350-store quota, he has 500 projects on his plate currently, with the hit rate being around 40 percent. “I’m already positioning the land purchases and where I want to be as those centers come off the ground,” Levy says.
Although Levy admits he is one of the last of his kind when it comes to making physical trips to each and every prospective location, he still sees his way as better. “It drove me nuts that you choose real estate, take it to the broker, take it to a room 3,000 miles away, and everyone would stare at a picture,” he says.
Building a New Location
Mattress Firm’s ideal new location is one that is freestanding with a high degree of visibility. Because of the recession, these two criteria are often difficult to find. So, when Levy does come across one of these rarities, he acts. As a developer, nothing is off-limits in Levy’s eyes, not even a gas station or BBQ shack; if it has a massive presence on the road, he will work with it. He credits much of his ability to do so on his team, which is filled with people who have ground-up work experience. “It isn’t fit and finish,” Levy says. “They will tear into any building, and my architecture team will design new buildings.” The company outsources all its work and alternates between four different architects, 20 contractors, and 20 developers.
Because Mattress Firm prefers existing properties and vacant buildings, each location is custom. With the exception of the interior aesthetic, there are few cookie-cutter stores. “We are basically a showroom, so there will always be optimal glass paneling so [that] people can see our product.”
The interior design is modeled after a semimodern home. Neutral colors of beige and sable adorn the walls, with white trim and drop ceilings with soft and muted lighting to remind the customer of being at home. The company uses Store Floors for all its flooring systems. Porcelain plank tile flooring works with all wall colors and can be found in the entrances, bathrooms, and sales-desk areas. Each store has a standardized look.
Levy says that the most important feature of each location is the signage. The company invests the most money and time in how the branding is presented at each store. The window graphics are a combination of frosted vinyl and printed graphics designed to promote exterior branding. Inside the store are series of posters promoting the Mattress Firm mission; each store has a minimum of four of these posters. These store-design guidelines are applied at each location.
The standardization has made opening locations at a rapid pace the norm for the company. Levy is already eyeballing properties for stores that won’t be built for a few years. “We tend to have the look standardized, but we go where the best real estate is,” he says. “I love our flexibility. We will do anything it takes to get a deal done and open a store properly.”
