Tuft & Needle, the bed-in-a-box brand with the second-largest market share after Casper, has agreed to merge with Serta Simmons.
With this partnership, Serta Simmons, one of the biggest players in the $29 billion mattress industry, will join forces with a fast-growing, digital-native startup. Serta Simmons already has its own bed-in-a-box brand, called Tomorrow Sleep. Tuft & Needle, which was founded in 2012, serves a slightly more price-conscious customer, since it is known for its rock-bottom prices, which start at $350 for a twin bed (compared to Tomorrow Sleep’s $545 twin bed). The terms of the agreement were not disclosed and the transaction is expected to close in the next 60 days.
It’s clear that customers are increasingly opting to shop for their mattresses online. Mattress Firm, the biggest retailer in the industry, recently announced it will shutter stores. It is reportedly considering bankruptcy. By bringing on Tuft & Needle, Serta Simmons gets a digital-first brand along with the expertise of the founders, who managed to survive in a highly competitive online environment, where there are hundreds of bed-in-a-box brands. According to a statement put out by the two companies, Tuft & Needle will remain its own separate brand, but the startup’s founders will help shape Serta Simmons’s omni-channel strategy.
For Tuft & Needle’s part, joining forces with one of the biggest players in the market is a good outcome, particularly since other big online mattress brands, like Casper and Saatva, have said they are each considering an IPO, which would dramatically accelerate their growth.