Simmons Bedding Co., one of the leading manufacturers of high-quality mattresses, is facing tough times as it grapples with a decline in sales amidst economic uncertainty. The company recently reported a 6.4% drop in sales for the year 2022, marking the first time in a decade that it has experienced a decline in revenue.
According to a spokesperson for the company, the downturn in consumer sentiment that began in the latter half of last year was the primary factor behind the sales drop. Despite this setback, Simmons remains committed to its customers and is determined to bounce back.
The decline in sales has also impacted the company’s operating profits, which fell by 35.8% to KRW 11.8 billion (approximately USD 10.5 million). The operating profit margin dropped by 1.9 percentage points year-over-year to 4.1%, and rising labor and rental expenses have put additional pressure on the bottom line. In 2022, Simmons’ cost of goods sold exceeded KRW 90 billion for the first time, reaching KRW 92.2 billion, while labor costs rose by 10.8% to KRW 41 billion.
To counter these challenges, Simmons declared a state of emergency earlier this year, and its executives took a voluntary 20% pay cut. The company also raised employee salaries by an average of 5.9%, while pledging not to raise prices for the second consecutive year. A company spokesperson explained that Simmons is committed to being a beloved brand for consumers, rather than focusing solely on profit defense, and that the company will overcome its challenges by fulfilling its social responsibility to customers.
Despite the challenges facing the company, Simmons remains optimistic about the future. The company has a rich history of providing high-quality mattresses, and it is confident that it will continue to do so for years to come. With a renewed focus on fulfilling its social responsibility and meeting the needs of its customers, Simmons is poised to weather the current economic storm and emerge stronger on the other side.