Simmons’ flagship brand, Beautyrest®, and its slogan are getting special attention. “The tag line, ‘Living Life Fully Charged®,’ lends itself to new categories,” Merker suggests. “We are looking at expanding licensing in categories that we have traditionally never licensed.”
With Westin Hotels, Simmons co-brands a special luxury mattress that is named the Heavenly Bed®. “We supply mattresses to 18 of the largest 20 hotel chains in the country,” Merker declares.
Simmons manufactures its mattresses at 20 factories in the United States, Puerto Rico and Canada. The company has 11 licensees in the United States and three in Canada. It also has 26 international licensees and sublicensees. Simmons’ branded products are distributed in more than 100 countries around the world.
Domestic license agreements are typically for three to five years. Merker estimates approximately 60 percent of them are renewed. “Traditionally, if the licensee is a good-performing licensee and adheres to our brand and quality standards, we will negotiate a renewal,” Merker says. “Long-term partnerships have proven to be the best vehicle for developing our brands. These partners are typically good stewards for our brands and we both reap the benefits of that.”
Often an ownership change by a licensee causes a change in its relationship with Simmons. “We have assignment rights in our agreements, so the acquiring company is required to go through a formal proposal process in order to continue to do business with us,” Merker notes. “We do not automatically grant the acquiring company the license. If that process proves successful, the acquiring company is granted the license. If we determine the new owner is not the right fit, Simmons may seek another manufacturer.”
Simmons requires a high degree of innovation from its licensees. “As a leading innovator in the mattress category, we also look for companies that will bring innovation to the table and have a reputation for high quality products in the marketplace,” Merker says. “Quality and safety are the first two things we look at in terms of manufacturers we bring onboard, followed by bringing innovative new products to the table. We want to make sure that they are a strong, stable company and have a good track record of manufacturing quality products.”
A good example Merker cites is Delta Children’s Products. Several of Delta’s executives are members of ASTM International safety committees and task groups that assist the Consumer Product Safety Commission with establishing safety standards for cribs and crib mattresses. Delta Enterprises has been one of Simmons’ top licensees for more than 10 years, producing cribs, juvenile furniture, bassinets and strollers under the Simmons brand. Three years ago, crib mattresses also were licensed to Delta.
For the future, Simmons is continuing its history of innovation by introducing products with cutting-edge technology. “In 1925, we invented the unique independent Pocketed Coil® spring design that formed (and continues to form) the basis of the Beautyrest® mattress,” Merker maintains. “Simmons was the first in the mattress category to introduce the queen and the king-size mattresses to the industry. We are constantly looking at new technology that we can be the first in our industry to bring to market.”
An example of such technology being introduced this year is the ComforPedic IQ™ mattress that uses self-adjusting Smart Response Technology. This technology allows the mattress to automatically calibrate to the user’s body weight and position on the mattress.
Simmons has recently increased its advertising spending. “In 2012, our advertising campaign reached a billion consumer impressions,” Merker maintains. “That’s the number of times consumers see Simmons advertising, whether on TV, in the digital space or in print media. In 2013, we reached 2 billion consumers. In 2014, we are targeting to reach 3 billion.”
That amount of exposure will help continue to build the company’s brands and strengthen its licensing image. “Advertising our brands and building awareness levels pushes the consumer back into the store asking for our products by name,” Merker asserts. “This will help to ensure that Simmons continues to outperform its competitors as it did in 2013.”