Dorothy Whitcomb – Bed Times Magazine – 02/15
All of the companies that now comprise The Boyd Group evolved from a single waterbed bed store that President and Chief Executive Officer Dennis Boyd founded in Columbia, Missouri, shortly after graduating from college. But back then, no one but Boyd and one banker—he was turned down by 22 others—thought that selling waterbeds in central Missouri was a particularly good idea.
Today, the St. Louis-based corporation, composed of three separate but related sleep product companies, has entered a new stage in the reinvention and evolution that have spurred its growth since 1977. A licensing agreement signed last year with Heritage Home Group, a home furnishings company based in High Point, North Carolina, has positioned Boyd to offer highly recognized national brands long associated only with furniture. The addition of these brands, which include Broyhill, Thomasville, Lane and Drexel Heritage, will allow the company to grow by an estimated 20% annually for the foreseeable future, company executives believe.
The three companies that comprise The Boyd Group include Boyd Specialty Sleep, The Bedroom Store and Blue Magic. Boyd Specialty Sleep, the largest of the three, manufactures and imports latex and memory foam mattresses, waterbeds, airbeds and related accessories. The Bedroom Store is a chain of St. Louis-based stores that sell both sleep products and bedroom furniture. Blue Magic is a company that produces conditioners, cleaners, parts and accessories for waterbeds.
Boyd developed the idea for his waterbed store as a student in the School of Business at the University of Missouri, Columbia. A world-class swimmer, Boyd believed in waterbeds, because his own had provided relief from serious shoulder tendonitis brought on by years of competitive swimming. “We had a semester-long project in which we were to pick a channel of distribution and come up with a business plan,” he recalls. “I gave my presentation on the waterbed store and thought I did well. All 30 kids in the class and the professor gave it a thumbs-down.”
Opportunities mixed with challenges
Opening the store led to another opportunity. Back then, waterbed sheets were hard to come by so Boyd developed a cottage industry for manufacturing them. Within two years, it grew into a full-fledged sheet manufacturing company that employed 50 people. “It grew like crazy and we doubled and tripled our business every year,” he says.
Boyd’s success with waterbed sheets did not escape notice by the fabric manufacturers who supplied him. “In the same two-week period, they all told me that they wouldn’t sell to me any more, because they wanted to get into the waterbed business, too,” Boyd adds. Within three weeks, he was out of the sheet business. Boyd resurrected that business by moving it to Taiwan. The “huge price advantage over domestic suppliers,” he says, once again spurred rapid growth. A quota on sheet importation imposed by the U.S. government led to the next revision of Boyd’s business model. “Since 90% of waterbed vinyl came from Taiwan and there was no quota on waterbeds,” he reasoned, why not produce the beds themselves?
Boyd sold waterbeds in Europe and Australia directly from Taiwan. He then opened a facility in California and began importing waterbed materials and finished beds into the United States. The waterbed craze was just beginning to hit the U.S. in 1981 when he opened his first store in St. Louis. “At the peak of waterbeds’ popularity, I had six stores in St. Louis and 30 throughout the country,” he says. Inc. magazine took note, naming Boyd’s enterprise to its “List of Fastest-Growing Companies” each year from 1983 through 1987.
Then, Boyd says, business took a dive. “In the late ‘80s, it seemed like everyone stopped buying waterbeds. From 1987 on, sales declined by 20% every year. It wasn’t a growth business any more and I needed to reinvent myself.”
Market research and a penchant for product design—he earned his first two patents for waterbed improvements he devised—led Boyd to approach the sleep products industry with a fresh perspective. “Research showed us that 25% of mattress buyers were also in the market for bedroom furniture, and would prefer to buy it at the same time,” he says, “and that 75% of people buying bedroom furniture also wanted to buy mattresses.”
Mattresses and much more
Convinced the synergies were strong, Boyd launched The Bedroom Store, a company that now includes 10 retail showrooms offering mattresses and bedroom furniture in the St. Louis area. The 8,000- to 15,000-square-foot showrooms are up to four times larger than typical mattress stores to allow for the proper display of products. The retail stores offer distinct advantages to the vertically integrated company but contribute only about 5% to The Boyd Group’s total annual sales.
“We’ll never have stores outside of St. Louis because we want to focus on manufacturing. There’s only so far that you can drive your organization from the standpoint of capital and people constraints,” he says. “We have a unique selling proposition and I view my stores as just another customer for my manufacturing business.”
The company’s “unique selling proposition” rests on the fact that it is one of very few manufacturers that offers every type of specialty sleep product under its own brand. Boyd then enhances the appeal of one-stop shopping by making it easy for retailers to partner with the company.
Midwest Regional Manager Kristine Mattina explains: “We offer many efficiencies to our retail partners, including trackable UPS delivery, no minimum purchase requirements and lower freight costs because of mattress compression. We also have six in-house customer service reps devoted to delivering excellent service to our wholesale base.”
Southwest Regional Manager Dirk Smith believes the addition of licensed Heritage Home brands strengthens the company’s appeal to retailers. Boyd currently distributes to a full range of channels, he says, including furniture stores, specialty-sleep shops, big-box retailers and rent-to-own retailers. Product also is sold on Internet sites, in catalogs and through distributors. In addition, Boyd Specialty Sleep provides private-label product development for large volume retailers.
“We sell to over 5,000 storefronts nationwide,” Boyd says.
“What we’re trying to do with the national brands,” Smith says, “is to provide retailers with unique products so that they can differentiate themselves and counter the ‘everybody has it’ syndrome. To have a brand name that everyone recognizes and trusts is a pretty good strategy.”
Banking on brand
The strategy, Boyd says, is once again rooted in solid research into consumer appeal. He cites the August 2008 Furniture Brands International Consumer Segmentation Study, which analyzed Internet searches of national home furnishings brands and compiled a list that ranked their value and strength with consumers. All Heritage Home brands placed in the top 10, with Thomasville and Broyhill holding down second and third place, respectively.
The company introduced three collections in each of the Thomasville and Broyhill brands in 2014 and plans to expand those brands as well as roll out the Lane and Drexel Heritage brands this year.
Thomasville’s Synchrony Air Sleep Systems are designed to go head-to-head with Select Comfort’s Sleep Number beds. The collection includes a four model, two-chamber collection, which retails in queen from $1,799 to $3,099. The four-model, six-chamber system retails from about $2,199 to $3,499. The Thomasville line also includes two latex collections. The three models in the Natural Flex Supreme collection, constructed from Dunlop latex, range in price from $999 to $1,599. The Talalay latex Natural Flex Ultra collection has four models that retail from $1,999 to $3,699.
Boyd’s Broyhill brand currently includes three memory foam collections. The three-model Sensura collection retails from $299 to $799. The four-model Sensura Cool Flex collection features gel-infused memory foam and retails from $899 to $1,499. All Thomasville and Broyhill latex and memory foam models use foam springs for contouring and support. Boyd’s newest offering, Broyhill 02 Performance Sleep Systems, uses liquid gel-infused engineered latex foam in the comfort layer and a Celliant fiber cover to capture the sleeper’s radiant energy, increasing oxygen levels, improving circulation and enhancing sleep, the company says. The three models in this collection sell for about $599 to $799.
After bringing a prototype to last summer’s Las Vegas Market, the company previewed a consumer-customizable Cube Gel Foam mattress at the January 2015 market. When launched, the beds are expected to retail for more than $999.
The company also offers an extensive range of specialty sleep products under its Boyd brand. Five memory foam models range in price from $299 for the juvenile bed to $799 for queen. Boyd’s two gel foam models sell for $799 to $999, while its four-model engineered latex collection sells for $399 to $699.
Sixteen models of Boyd-branded Air Sleep Systems also are available. Two and six-chamber systems, ranging from $1,599 to $3,199, are available assembled or knocked down. A promotionally priced air system retails from $699 to $999.
Floatation offerings include hard-side waterbed replacements and soft-side floatation sleep systems. They retail for $899 to $1,499. A guest bed collection includes a folding memory foam model, an inflatable airbed and rollup sleeping pads. This collection retails from about $99 to $199.
Driven by innovation
Innovation remains the cornerstone of product development for the company, which holds more than 30 patents and has several others pending.
The company also offers a wide range of sleep accessories under the Thomasville, Broyhill and Boyd brands. Mattress support systems include heavy-duty metal and wood-slat platforms, upholstered platforms, wired and wireless adjustable bases, and traditional box-spring foundations.
Broyhill memory foam and Thomasville latex toppers also are available. Memory foam, gel memory foam, latex and synthetic down pillows are offered in both brands. The company will add waterproof and bedbug-resistant mattress protectors in April 2015.
Boyd makes its products at a 320,000-square-foot plant in Fontana, California, and at its 70,000-square-foot St. Louis facility, which houses its corporate headquarters as well. It also contracts production with 15 facilities in China, four in Malaysia and three in Vietnam. The company maintains an office in Shanghai and stations employees throughout China to monitor production efficiency and quality. The company produces 650,000 to 700,000 mattresses annually. Because it warehouses in both St. Louis and Los Angeles, Boyd says, “If we get an order on Monday, we’re shipping on Tuesday morning.”
Although adding national brands has led to success in opening new accounts, Smith says, it has brought new challenges, especially in the area of product training.
Mattina says the focus of sales training has shifted from a price and spec orientation to conveying brand value and strategic advantage. “We’ve developed an online training and incentive program that allows retail sales associates to move through modules, and acquire points for answering questions and making sales,” she says. “The points are exchanged for gifts ranging from iPads to vacations.”
Boyd forecasts that his company will post a 20% increase in annual sales for the next several years. “It’s easy to manage financially and well within our people’s ability to produce,” he says.
Most of that growth will come from sales of the Heritage Home brands in the U.S. and Canada, he predicts. “We feel that we have billion-dollar brands and we’re putting our energy into penetrating those markets.”
Making a better bed—and a better life
The culture of any organization owes much to the perspective and values of its leader. In the case of Denny Boyd, who founded Boyd Specialty Sleep in 1977 and serves as president and chief executive officer, many of those values are drawn from the world of competitive swimming.
Boyd is a natural when it comes to leading teams—and winning. He knows the dedication and hard work it takes to do both. In high school, he was ranked 17th in the world in the 100-meter backstroke and was the top swimmer in his class nationwide. In college, he set school swimming records every year, while maintaining a grade point average that put him at the top of his business school class. Today he continues to swim and to win. Boyd holds St. Louis Senior Olympic records in the 50-yard backstroke and 100-meter individual medley for the 50 to 54 age group. Last summer he competed in the Masters World Championships in Montreal, where he placed fourth in the world in the 50-meter backstroke and seventh in the world in the 100-meter backstroke.
So what does swimming have to do with corporate culture? Listen as Boyd and two of his key managers talk about their company and what it’s like to work there.
First Denny Boyd: “We try to keep things focused and simple so that people don’t get distracted in today’s attention-deficit-disorder world. Everyone in my company has five goals, including me. If you can’t count them on one hand, they can’t be that important.
“Everyone in the company knows my goals and everyone else’s too. We all articulate the goals and how they will be implemented and achieved, which creates internal synergies and partnerships.”
Apparently it works. “We are a close group, communicating regularly with each other to share best practices and ideas,” says Kristine Mattina, Midwest regional manager. “As product-category managers, each of us is tangibly invested in the success of each member of the management team. Our management structure facilitates teamwork and the development of relationships that each of us relies on.”
Boyd does what he can to make sure those relationships are nurtured and sustained. “People know it’s not all blood, sweat and tears around here,” he says. “When you win it’s OK to celebrate, and we celebrate success with recognition and pats on the back. “If you can keep your organization fun, successful, motivated and on target, people enjoy working here.”
Southwest Regional Manager Dirk Smith, who has worked in the bedding industry for 20 years, is one of those people who enjoys working at Boyd. “I’ve never experienced a manager like Denny before,” he says. “He’s supportive when he needs to be and hands-off when he needs to be, which makes my job a pleasure.”
Passion can energize a culture, and Boyd is passionate about the environment. He used his eight years as president of the Specialty Sleep Association to foster efforts to “counteract greenwashing,” he says. “We wanted to create consensus on standards and certifications for different levels of green that consumers could look at and believe in.
“A big part of our company culture is to be green. We don’t just talk about it; we do it,” he adds. “We’ve spent millions on green projects. When we finish our solar project next year, every single one of our buildings will have solar panels. Not only will we be able to power our factory, but we’ll be able to sell enough power back to the grid to power 250 homes.”
Boyd knows that some business people think making a profit and improving the environment are mutually exclusive efforts. He disagrees. “Tax incentives help a lot and the return on investment can be less than two years,” he says. What’s more, the employees at Boyd Specialty Sleep approve the effort.
“They’re proud of it and feel as if they have a greater purpose than just clocking in and clocking out,” he says. “We do more than just make a bed. We think we make a better bed, but it’s really about making a better life.”