Simmons takes the lead in Korea’s bed market

[Courtesy of Simmons Bedding Co.]

Simmons Bedding Co. ascended to the top of the South Korean bed market, toppling long-standing leader ACE BED. Simmons announced on Monday that its annual sales for 2023 totaled a record-breaking 313.8 billion won ($232 million), up 10 percent from the previous year and the highest sales figure since Simmons Korea was founded in 1992. Simmons Korea operates independently from its American counterpart, manufacturing and selling products locally while using the Simmons brand name under license.

The company also reported a 170 percent surge in operating profit, which came to 31.9 billion won. The profit margin stood at 10 percent at the end of 2023, up by 6 percentage points from a year ago.

The company attributed this success to its dominant presence in the premium mattress market, particularly those priced over 3 million won, with the explosive growth of the Premium Vegan Mattress Collection ‘N32’ a significant driver of the exceptional results. The ‘Beautyrest BLACK’ line, a luxury mattress range with prices starting at 10 million won, has consistently sold over 300 units monthly since breaking the threshold in January 2023. The ‘N32’ Vegan Collection also saw its sales triple over the past year.

The company believes that its performance, particularly in a sluggish economy, is a testament to consumers‘ preference for quality and brand reliability. But despite the notable increase in operating profit margin, the company cautioned that the improvement was partly due to significant cost-cutting measures, including reduced TV advertising expenses, under a temporary emergency management system. The company also said that continued efforts are necessary to maintain and improve profitability amid rising costs across wages, commissions, logistics, and rent.

For its part, ACE BED, a stalwart in the Korean bed market since 1963, saw a decline, losing its top spot to Simmons. According to financial disclosures to the Financial Supervisory Service (FSS), ACE BED’s sales fell by 11.5 percent to 306.4 billion won in 2023. The company pointed out the disadvantages of its distribution model, which relies heavily on wholesale sales via dealers compared to Simmons‘ direct retail strategy. But the company remains optimistic, noting early signs of growth in the first quarter of 2024 and anticipating a rebound in performance.