Actions will expedite Grid innovation and deliver cost synergies, company officials say.
Purple Innovation Inc., headquartered in Lehi, Utah, announced it will consolidate its mattress production operations into its McDonough, Georgia, facility and close its manufacturing facilities in Salt Lake City and Grantsville, Utah.
The consolidation is expected to be completed by Dec. 31, and the Utah manufacturing plants are expected to close during the first quarter of 2025.
“This is an offensive move,” said Rob DeMartini, CEO of Purple Innovation. “These actions will enable Purple to streamline our operations and to reinvest in technology and marketing to grow the category. This decision was not made lightly. Over the past year, we have driven savings through manufacturing efficiency and supply chain initiatives, and we are confident that the consolidation of our manufacturing footprint is an important step to advance our (Gel) Grid innovation and build momentum with our ‘Path to Premium Sleep’ strategy, which will set Purple up for positive operating cash flow and market share growth over the long-term.”
Purple will remain headquartered in Utah with its four showrooms. All research and development activities will continue to be based in the Innovation Center that Purple opened in Draper, Utah, last year. As part of the plan, the company expects to open a new distribution center in Utah and plans to increase capacity at its Georgia manufacturing facility. The mattress producer also announced plans to reduce several corporate positions.
With the plan completed in early 2025, these actions are expected to generate $15 to $20 million in EBITDA benefit on an annualized run-rate basis starting in 2025. Purple expects to incur restructuring costs of $35 to $45 million, beginning in the third quarter of 2024 through the second quarter of 2025, of which, $26 to $32 million is non-cash. Purple does not expect these actions to impact full-year 2024 guidance targets.
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