I recently saw that Mattress Firm and Tempur had a fallout with contracts, as a result they will no longer do business together. I was wondering if you had any additional information on this-- will tempurs go on “sale” at Mattress Firm as since they will need to move inventory? Have you heard of this relationship coming back together? Does this benefit the smaller retail guys or is everyone just tired of tempurpedic’s “ego”? I have read a lot of your comments on tempurpedic and the overall reviews but maybe the price gets taken down because of these events and reshapes the pricing in the industry? Better entry point for the consumer? Thank you for your time
Hi speakinofsleep,
Welcome to the Mattress Forum! 
No, I’m not privileged to that information – a bit above my pay grade! :lol:
Tempur Sealy (TPX) and Mattress Firm (MFRM) had negotiations the week of Jan. 23, after MFRM said they were going to terminate all of their contracts unless TPX agreed to MFRM changes to the contract plus economic concessions. The two sides couldn’t come to an agreement and TPX issued the termination notices for their bands to MFRM on Jan.27. TPX anticipates total cessation of business with MFRM 1Q 2017.
In the short term it appears to be a lose/lose for both companies, as MFRM business is about 20% of TPX overall business, and TPX represents about 40% of MFRM sales. Speculation abounds about what will happen next. MFRM might enter into a new agreement with TPX. MFRM (owned by Steinhoff) might build their own mattress producing facility domestically to fill the void, or acquire another company that already has that capacity. Or MFRM might acquire TPX. It’s interesting to note that by terminating the agreement, TPX value will probably drop short-term, which could make it less expensive for Steinhoff to acquire TPX. Who knows?
I have no idea of what Mattress Firm will do regarding inventory. They have a huge network and they don’t necessarily have a history of “giving” anything away, so I wouldn’t hold my breath if you’re looking for deep discounts on pricing. These products still have value and most consumers don’t know/care if Mattress Firm is going to continue carrying Tempur Sealy products. I’m not quite sure you mean about Tempurpedic’s “ego”, as I think all of the large brands have quite a bit of “ego” in this industry. In the end it all comes down to business, and that’s business in the Billion$.
Other than that, I have no personal information about any of the goings-on with this, but I look upon it as a curiosity like many others in the industry.
Phoenix
As an RSA in the Houston area, my personal experience is that Tempurs are the most profitable beds to sell! Any RSAs in here agree with me?
Also, do any of the experienced folks in here who have been selling Tempurs have a guess about whether people will just find their Tempurs online or at another store even if Mattress Firm stops carrying them?
Hi TexasRSA,
Welcome to the Mattress Forum!
There are many brands that run on margins that are the same, or even higher, than Tempurpedic, many of them in a similar model of tightly “price controlled” strategy. These large margins are one of the very reasons that salespeople (RSAs) can be so heavily commissioned and spiffed to sell such products, and why many RSAs prefer to “recommend” these products to their customers.
While Tempurpedic mattresses generally use good quality materials, they are in much higher (and mostly unjustifiable) budget ranges and for most people they certainly wouldn’t be in the best “value” range compared to many other smaller manufacturers that use similar (or in some cases better) quality materials that are in much lower budget ranges. For consumers, there is more about Tempurpedic in general in posts #1 and #2 here.
But higher margins are not found just in higher-priced items. Many stores make very large profits (sometimes 3x cost) on lower-quality items that are made to “look” like they are a high-quality item, but offered at a much lower price. Some of these can return a margin even higher than brands like Tempurpedic.
This of course makes it that much more important that consumers educate themselves with items like the mattress shopping tutorial here, and also find out information listed here so that they can compare the quality of the materials and components to the durability guidelines here to make sure that there are no lower quality materials or weak links in a mattress that would be a cause for concern relative to the durability and useful life of a mattress before making any purchase, and also use that information to compare different mattress models/brands to each other.
Unless they are part of the board meetings of Tempur Sealy (and then they wouldn’t talk ), anything would be speculation. What I’ve read from various analysts speculates that TPX could certainly recapture much of their volume over time through expansions to other retailers (and the growth of those retailers themselves, such as Mattress1One); a rekindling of their agreement with Mattress Firm, or an acquisition of a company like Steinhoff/Mattress Firm. I haven’t run across anything that hints at TPX changing their channels for selling to online, but that would be a very large change in how they do business if they decide to go online and would potentially lead to fewer brick and mortar stores offering their products as well. Of course, just because I haven’t heard of something has no relevance, as I am not part of any “inner-circle” of information regarding this besides the analyst reports that are available publically.
While talking about this is a little off the path of the normal conversations here on the forum, it certainly is interesting to speculate and guess what is going on behind the scenes of these large companies.
Phoenix