Simmons, a bedding company, is currently undergoing a transformation by shifting away from a single brand operation centered on premium products to a multi-brand strategy that prominently features the independent brand "N32." Last year, Simmons recorded its highest-ever revenue of 329.5 billion won, a 5% increase from the previous year. During the same period, operating profit surged 65% to 52.7 billion won. It surpassed ACE BED, which had previously held the top spot in the bedding industry sales, for the second consecutive year in 2023.
Simmons said, "The strategy focused on the premium mattress market and the establishment of the high-end vegan mattress brand N32 has led to improved performance." The reason Simmons is strengthening its multi-brand strategy is to respond to the diversified needs of consumers. Some analysts believe that the bankruptcy situation of Simmons in the United States indirectly influenced this decision. Although the Korean division of Simmons operates separately from its U.S. counterpart, it is interpreted that there is a certain degree of "distancing" in terms of brand image.
According to industry sources on the 23rd, Simmons launched the vegan mattress brand N32 at the beginning of last year. N32 was first introduced in 2022 as part of the Simmons lineup but has since been transitioned to an independent brand. N32 has eliminated animal materials and received vegan certification. It also emphasizes "four major sleep safety" including radon safety and flame retardant certification. In addition to its offline distribution network centered around department stores, it is actively establishing dedicated showrooms and an online mall for N32. Currently, there are 26 offline N32 stores operating nationwide. Recently, it also broadened its reach by launching "N32 Jjokomi" for pets, which is a small-sized pet mattress designed to the same standards as existing mattresses.
The industry evaluates that the reason Simmons is strengthening its multi-brand strategy is not solely to increase sales. An industry official noted, "The separation of brands appears to be a strategy to respond to the changing market structure and the diversification of consumer trends. As the consumer base has become segmented into cost-conscious buyers, environmentally and ethically minded Generation MZ individuals, and premium consumers seeking high-function sleep solutions, it was determined that responding with a single brand would be challenging." It suggests that operating high-end and low-cost lines under one brand might tarnish the premium image.
The distribution strategy has also been differentiated. While Simmons maintains a premium channel centered on department stores, N32 is diversifying its distribution channels through online platforms, showrooms, and trendy editing shops. This maximizes the distinction between brands.
Some observers believe that Simmons' multi-brand strategy is not unrelated to the bankruptcy situation of Simmons in the United States. Korean Simmons has operated separately from U.S. Simmons since 1992, so it is not directly affected legally or financially. However, since the Simmons brand is recognized as a global bedding brand, it is interpreted that Korean Simmons has distanced itself for brand image management and consumer trust.
Serta Simmons Bedding, the parent company of Simmons in the United States, sought Chapter 11 bankruptcy protection on January 19, 2023, with $1.9 billion (2.5 trillion won) in liabilities. The combined factors included supply chain disruptions due to the COVID-19 pandemic, a sharp drop in demand, and failures in debt restructuring. After six months of rigorous restructuring, it emerged from bankruptcy protection. During the restructuring process, a new board of directors was appointed, and through negotiations with some creditors, the liability was reduced to approximately $315 million (about 448.5 billion won). They maintained production facilities in the United States but restructured the legal system for recovery.
Even during the bankruptcy process, Serta Simmons Bedding maintained normal operations, focusing on market position recovery through a complete overhaul of its product portfolio and increased marketing investment. However, the competition in the global bedding market is intensifying as competitors like Tempur Sealy International and Casper are rapidly increasing market share in North America.
An industry insider stated, "Simmons' consistent emphasis on the independence of the N32 brand goes beyond simple marketing; it aims to build a stable brand image distinct from the risks associated with U.S. Simmons." They added, "In fact, Korean Simmons separated the N32 brand immediately after the U.S. Simmons bankruptcy issue, and considering consumers' sensitivity to brand trust, the multi-brand strategy centered on N32 will be further strengthened moving forward."
Meanwhile, some analysts speculate that Simmons' multi-brand strategy targets competitor Tempur. The strategy is to actively attack the existing market dominated by Tempur's foam mattresses and adjustable bases with the "N32 Foam Mattress" and "Motion Curved BASS II."