Online Mattress Upstart Casper Aims For Further Disruption, To Open 200 Physical Stores
Online mattress seller Casper, one of several upstarts challenging the long-established model of big-box mattress retailing, is planning to open as many as 200 physical stores over the next three years.
That many stores would represent a vast brick-and-mortar expansion for the company, which currently has fewer than 20 locations, most of which are pop-ups. Besides completely new stores, the expansion would include converting most of the company's temporary locations into permanent shops.
The expansion is part of a strategy by Casper to differentiate itself from the other online mattress sellers that have joined the disruption of that retail segment in the last few years, the Wall Street Journal reports.
“It’s a way to educate new consumers,” Casper CEO Philip Krim told the WSJ.
Other online mattress stores include GhostBed, Helix Sleep, Leesa Sleep and Tuft & Needle. Currently, Casper is the leader in the online mattress segment, accounting for about half of the segment's sales, Retail Dive reports, citing Edison Trends data. In 2017, Casper reported $600M in total revenue.
Investors have been keen to support Casper. The e-tailer received $1.85M in seed money in early 2014, and three subsequent rounds have raised about $238M for the company. Retail giant Target Corp. was a third-round investor last year, ponying up $75M, and entertainers and athletes Curtis “50 Cent” Jackson, Carmelo Anthony, Kyrie Irving, Shaun White and Andre Iguodala have also invested.
In 2017, Casper started selling its mattresses and bedding products at 1,000 Target locations.
As an online seller, Casper has managed to work around the difficulties of selling conventional mattresses without physical locations, namely by offering expandable foam mattresses in various sizes that all nevertheless fit into relatively small shipping boxes. The company has also made a practice of not charging extra for shipping, and offering its products at a variety of price points.
The Casper expansion comes at a time of tumult for more traditional mattress retailers. Mattress Firm is reportedly considering bankruptcy as a way to reduce its oversized real estate portfolio, after announcing at the end of last year that it would close about 200 of its 3,400 locations.
Mattress Firm's parent company, Steinhoff International, said recently that Mattress Firm lost more than $150M on nearly $1.5B in sales for the first half of 2018. Mattress Firm also happens to be in a legal battle with Colliers International Atlanta over the leasing deals involved in its previous aggressive growth strategy.
As of yet, Capser hasn't revealed any locations or the exact configurations for its planned stores. There are hints that the company has unusual things in mind at least for some of the stores.
In July, the company opened a showroom in New York City called The Dreamery. Rather than merely being a place to buy a mattress, customers can book 45-minute breaks — for which there is a fee — to take a nap in one of the store's nine Casper-equipped sleep pods.
“The Dreamery is about making sleep and rest a part of our regular wellness routines — similar to how many people prioritize a workout class,” Casper Chief Operating Officer Neil Parikh said in a statement.