This family-owned sleep shop chain in California finds success through tenacity, flexibility and innovation
| Photography by Jordan Famer Photography |
From a single store, Matthews Mattress has grown to a chain of nearly a dozen locations dotting the small towns and suburbs around Sacramento, California. Even with an onslaught of online challengers and price-competitive mattress sellers in its region, the family-owned retailer thrives.
Why? Owner Kevin Matthews points to a number of reasons, including attractive, well-appointed stores; a private-label mattress line that helps differentiate the retailer; and a flat management structure that gives employees both the responsibility of contributing to the success of the chain and the autonomy to cater to the individual needs of customers.
And there’s one more thing: “Tenacity. I don’t ever give up,” Matthews says. “I always find a way to make things work, sometimes by doing it myself or by getting my team to wade in and pull together so we all succeed.”
It began as an outlet with $39 twins
Kevin and Kristin Matthews, who had known each other as children growing up in Sacramento and reconnected when they were college-aged, married in 1990 and opened their business in 1991. “I think we’ve broken a record for owning a business together and still being happily married after all these years,” Kevin Matthews says.
He had dreamed of owning a business since he was a kid. “I grew up on the bad side of the tracks, but then transferred schools to the good side, and all my friends’ parents were doctors, lawyers, business owners. I wanted that life,” Matthews says. “I was ambitious as a kid, collecting newspapers and cans to buy baseball gloves and soccer shoes.”
After college at California State University, Sacramento, Matthews went to work for Abbey Carpet & Floor, first managing a carpet store and then overseeing several stores for the corporate office. But as a newlywed, he wanted to cut back on travel. “So, I was going to open my own carpet store when a colleague suggested to him that margins were better in mattresses,” he explains,
“A Century 21 moved out of its office space next to a carpet store, so I got a lease there and put some mattresses in,” Matthews says. “The carpet staff helped sell the mattresses and we did $70,000 in sales the first two weeks. I thought, ‘We’re on to something.’ ” Two months after opening that store in Vacaville, California, the company hired its first employee, Bill Holland, who is still with the company. In 1993, the retailer began opening additional locations, the next in Woodland, California.
The company originally was called Mattress Outlet and “delivered $39 twin mattresses for free,” Matthews says, with a laugh. In 2004, the retailer changed its name to Matthews Mattress to play up the fact that it is a family-owned business and upgraded its mattress assortment. “Our average ticket went from $750 to $1,150 in one year,” Matthews says.
The retailer now has 10 locations, plus a warehouse in Dixon, California, which sells closeout and discontinued models. In the early days, Matthews’ store-opening strategy was “to be wherever (then-market leader) Sleep Train wasn’t,” he says. That meant the small towns and suburbs around Sacramento, places like Davis and Napa.
“I was fine being No. 2,” Matthews says. “I knew I couldn’t knock them off, so I played in their wake.” After Mattress Firm bought Sleep Train and converted its stores to the Mattress Firm brand and while other players, including e-commerce specialists, have jockeyed for market share, Matthews Mattress has stuck with its method of gradually adding locations.
A do-it-yourself strategy
Matthews Mattress stores vary widely in terms of size, from about 3,600 square feet up to 6,200 square feet — a function of Matthews valuing a good lease as much as a good location.
“Leases are the No. 1 detriment to a company when you don’t have deep pockets or aren’t the No. 1 mattress retailer in your area,” he says. “I’d love to have the A+ locations, but those come with $27,000 a month rent. I can afford that when times are good, but when you’re my size, you have to be prepared for when times are bad.”
When the economy has been rough, like during the Great Recession, those lower rents, plus strong relationships with landlords, have helped Matthews Mattress stay in business. “Many reduced our rent 30% to 35% during the recession,” Matthews says. “We appreciate and help each other. One guy didn’t and when the lease was up, I left.”
When it comes to choosing locations for new stores, Matthews, a fourth-generation Sacramentan, relies on his deep knowledge of the area. He scouts spaces (“I try to be near a Costco or Starbucks for traffic,” he says) and negotiates leases himself, even taking on basic renovations if he finds a good spot that needs work.
“I usually hire a general contractor for the electrical, but we’ll do the sheetrock, the painting, put up the wood chair rail we use in the stores, run the speaker wire,” he says. “I’ll have a couple of guys from the warehouse help and it will take us two to six weeks to remodel a store.”
The interior design of a restaurant near his home inspired the look of Matthews Mattress stores, which feature jet black ceilings and ductwork, with attractive pendants and matching wall sconces to draw attention from the standard retail ceiling lights. Store walls are painted marigold and seafoam, with oak baseboards and chair rail. Beds are displayed with headboards and footboards. Nightstands and other bedroom furniture, lamps, flowers, and plants add homey touches.
The retailer carries Beautyrest, Beautyrest Black, Serta iComfort, Stearns & Foster and Tempur-Pedic brands, as well as the private-label Matthews Mattress Collection, made by Visionary Sleep. Queen-size mattress sets are priced from $299 to $2,899, with an average ticket of $1,250.
Matthews Mattress created its private-label line in 2004 when Matthews grew frustrated with an increase in customer complaints about body impressions. “I decided to design my own line,” he says. “I took a bunch of exchanged beds to Stress-O-Pedic and we broke them apart.” The solution, Matthews decided, was to laminate foams together and to “firm up the mattresses.” “It took us a while to figure it out, but we did and the beds really hold up,” he says. (Visionary Sleep, which is the largest Restonic licensee, bought Stress-O-Pedic in 2017.)
The Matthews Mattress Collection includes 14 models with pocketed coils and a variety of latex, gel foam and viscoelastic comfort layers. In addition to allowing Matthews the opportunity to make mattresses his way, the line helps set the retailer apart from competitors that carry the same national brands. “As an independent retailer, you have to have an independent line with higher margins to survive,” he says.
The retailer doesn’t carry a boxed bed yet. Matthews still is looking for the right model, wanting to find a mattress that makes sense as a convenient cash-and-carry or online option, and as a floor model that complements the retailer’s overall lineup.
Matthews Mattress does a small business in sleep accessories, with them accounting for about 10% of sales. The retailer carries pillows from Malouf, PureCare and Tempur-Pedic; sheets and protectors from Malouf and PureCare; and wood headboards/footboards and bedroom furniture from Coaster Fine Furniture.
The retailer’s adjustable sales are strong with an attachment rate of 40% to 50%. All Tempur-Pedic floor models are on power bases, with some other mattress models displayed on Sealy adjustables. When opening new-
construction stores, Matthews adds plenty of floor outlets to allow locations to carry even more adjustables.
At Matthews Mattress, there’s no standardized qualifying process for shoppers, in part, Matthews says, because he hires experienced salespeople, particularly top performers who have worked for other sleep chains. That leaves retail sales associates free to use the sales questions and approaches that work best for them — as long as they don’t start by asking what size mattress a shopper is seeking. “That’s the worst thing you can say off the bat,” Matthews says. “We’re a low-pressure sales staff. We greet customers and ask if they have any questions.”
Matthews also leaves the rest-testing strategy up to individual RSAs. “I have some guys who start by taking customers to Tempur-Pedic; others go to Beautyrest for feel,” he says. “I give them ownership and try not to dictate all the details down to that level.”
The majority of Matthews Mattress customers are middle class — “the typical hardworking family,” Matthews says, although the retailer has bed sets that appeal to a wide range of shoppers. Upper-middle-class consumers are drawn to the selection of Tempur-Pedic and Stearns & Foster, while budget shoppers can find quality bedding priced $599 to $1,299, Matthews says. “And we always have closeouts and discontinued products, so, if we have a budget shopper, we can put them in a better bed at a lower price rather than a ‘cheap’ bed,” he adds.
Matthews is proud of the fact that as much as 40% of sales come from repeat customers or referrals, and the retailer touts on its website that it was voted best mattress store several years running by readers of a local newspaper.
A layer-free management style
Matthews’ management philosophy is born of trust in his staff — and his dislike of layers of middle management. When it comes to running the overall company, he and his wife handle many duties themselves. Kevin Matthews oversees operations, while Kristin Matthews takes care of payroll and other bookkeeping. Other responsibilities are divided among RSAs. For instance, one handles Tempur-Pedic ordering, another Coaster purchasing. “Everyone has a chore, and we can pay our salespeople better without layers of management,” he says.
Matthews leaves day-to-day decisions at each store up to the RSAs who work there. “I tell people I hire that they’re going to run the store like they own it,” he explains. “I expect people to manage themselves.”
The company has 32 employees, including warehouse and delivery staff, many with long tenures, including Holland, the first hire who has nearly 30 years with the retailer. Patrick Gallego, the warehouse and delivery manager, has been with Matthews Mattress for more than 17 years.
“I don’t have high turnover,” Matthews says. “I try to create a good atmosphere. I go to their weddings and am always here to support them, so everyone feels like part of the family.”
During the Great Recession, Matthews went to his warehouse and delivery staff and told them he was in a bind, needing either to lay off staff or cut everyone’s schedule back. “I let them vote and they voted for four days a week,” he says, “and then we worked to help them find side jobs to keep everyone going.”
Unlike national and even many regional sleep chains, Matthews Mattress doesn’t have a formal training program, aside from getting new RSAs up to speed on the company’s policies and point-of-sale system. New hires spend the first few weeks on the job working at each store, “picking up nuggets and figuring out what strategies feel comfortable for them,” Matthews says.
“Buy by 5, Sleep by 9”
Knowing that the lasting impression a delivery team makes can be more important in the long run than the first impression an RSA makes, Matthews invests heavily in both new trucks and delivery staff, preferring to have his own in-house team. The retailer offers free setup, packaging removal, and takeaway of the old mattress and foundation. “We get compliments all the time about the speed and skill of our delivery guys,” Matthews says.
With all merchandise in stock at a warehouse centrally located among the retailer’s many stores, Matthews Mattress can offer same-day delivery (except on Sundays) to most customers, a service it touts with this slogan: “Sleep Like an Angel Tonight: Buy by 5, Sleep by 9.” The same-day delivery sets the retailer apart and can help close a sale, especially on bigger tickets.
“If you can close the sale and get the mattress in their home that day, you reduce the chance of people shopping somewhere else or having buyer’s remorse and changing their mind before delivery,” Matthews says. “Until you actually deliver, that shopper’s not really done shopping.”
A shifting ad strategy
Echoing what Sleep Savvy hears from many brick-and-mortar retailers, Matthews says that these days “advertising is basically rolling the dice” in terms of hitting on what will work best. In the retailer’s system of dividing duties among RSAs, Holland coordinates the store’s marketing efforts, with Matthews occasionally weighing in on budgets or other matters.
The retailer is adjusting its marketing strategy, shifting from a heavy rotation of ads during the major mattress holidays like Labor Day to a more consistent program. It’s also cutting back its TV spending and putting those dollars into digital and radio, including morning drive-time promotions on major radio stations in the Sacramento area. Matthews Mattress doesn’t spend a lot on print but continues to run ads in newspapers that service the small towns where its stores are scattered.
Although the retailer promotes sales, much of its marketing is geared toward building brand identity and customer loyalty. “We advertise to the customer who will buy from us again eight to 10 years from now,” Matthews says.
Matthews Mattress has a robust website with detailed information for consumers wanting to research mattresses, adjustable bases and sleep accessories, but the site doesn’t list prices, instead asking site visitors to request a price quote. “Request a quote works well for us,” Matthews explains. “The key is getting back to the customer within the first five minutes. We make sales off request a quote.”
Another key to success, both online and in-store, is the reputation-building word-of-mouth that comes from customer reviews on sites like Yelp and Google. Matthews Mattress works hard to keep customers happy — and the reviews positive.
“You have to offer good service,” Matthews says. “To beat the other guys, you need to have better product, have it in stock and deliver it fast.”
Succession planning: Matthews Mattress is looking 10 years ahead
Envisioning his future, Kevin Matthews sees fewer mattresses and more log cabins. He and his wife, Kristin Matthews, have been heavily involved in running the Matthews Mattress sleep chain since opening the first store in Vacaville, California, in 1991. Now, he says, they’ve begun planning for a time when they can turn their attention to other things.
“I like to build log cabins,” Matthews says. “I’ve got one in the Tahoe area and one in Montana, and I want to do more stuff like that.” Matthews notes that he’s taken only 26 days off in the past three years, and sometimes still had to make deliveries or cover for an employee on those “off” days. “And it would be nice if Kristin and I could go on vacation for more than a week and not have to get back to do payroll,” he adds.
Matthews is working on a 10-year plan to shift control of the business — down to renegotiating leases as they come up for renewal so they all end around the same time — although who will take control hasn’t been determined yet. The Matthews’ daughter, Kendell, is studying art history in college. It could be that she’ll want to take over, or perhaps the retailer will adopt a new model, such as an employee stock ownership plan, giving valued employees a stake in the business.
The Matthews already are finding ways to free up more of their time, recently hiring John Ledesma, a former executive with both Bryan College in Gold River, California, and Bryan University, in Tempe, Arizona. Ledesma, whom Kevin Matthews has known for nearly 25 years, is learning all aspects of the Matthews Mattress business. His arrival is well-timed for another reason: He’ll take responsibility for advertising and marketing when Bill Holland, the retailer’s longest-serving employee, retires in spring 2020.
For a time as he learned the business, Ledesma was flying back and forth between Mesa, Arizona, and the Sacramento area to allow his daughters to stay in school in Arizona, but he and his family planned to move to California in late May.
Julie A. Palm is chief wordsmith at Palm Ink LLC in Winston-Salem, North Carolina. She has 25 years of experience as a writer and editor for newspapers and magazines and as a publications director. She is a past editor in chief of both Sleep Savvy and BedTimes magazines. She can be reached at firstname.lastname@example.org.