Scott Burger, former President of Pandora Jewelry, was named CEO of specialty bedding manufacturer Classic Brands last year. Nevins & Associates President David Nevins recently talked to Scott about how the bedding business has fared during the Covid-19 pandemic and what the future holds for Classic Brands.

David Nevins: I know that Classic Brands is an innovator in the mattress industry but you’re more than that. Tell us who you are and what you do.

Scott Burger: Classic brands is a 30-year-old Maryland-based company. We are a leading American sleep products business of about 130 employees with a focus on providing high-quality and innovative products. Our products include traditional spring mattresses as well as foam and hybrid mattresses. We also sell a ton of sleep accessories including pillows, mattress toppers, bedframes and adjustable bases, and have recently begun expanding into the broader home furnishings category. We operate facilities totaling more than one million square feet of production warehouse and fulfillment space in Maryland and California. We serve large customers and employers including Walmart, Target, Macy’s, and Home Depot; large e-commerce players such as Amazon and Wayfair; and emerging American e-commerce brands such as Nectar and Purple.

DN: Can you talk a little bit about the growth of the company and what the future holds. We don’t see Classic Brands stores, so you’re exclusively B2B. Are your products branded as Classic when you sell to Wayfair and other stores?

SB: One of the things that differentiates Classic from other companies like us is our very flexible distribution model– customers can either buy directly from our ports overseas, we can truckload products out of our facilities, or we can ship directly to the consumer, so we offer many different distribution methods. One of the key elements that has driven our success is our introduction of the mattress-in-a- box concept– this has helped grow our business four times over the last five years. What we learned is that the traditional means of buying a mattress wasn’t appealing to a lot of consumers, from their experiences with finding a store to scheduling a delivery, etc. – that was not preferred by many people. What we’ve done is figured out a way to deliver a shrink-wrapped mattress to your door in a box that expands to size when you open it. All you have to do is put it on your box-spring and you’re ready to go.

DN: How do you compete against well-known name brand mattresses?

SB: Classic is brand agnostic, which I think is an advantage for us. If you go on Amazon and look at our Cool Gel 14-inch mattress, you’ll find that that brand does particularly well there, but if for some reason it stopped doing well, we could replace the brand to address consumer needs. We aren’t tied to any brand. We have a variety of prices, with different products up and down the price spectrum. The vast majority of our queen-sized mattresses are purchased for under $1000 so we do a lot of volume there. We saw early on that this industry has a lot of margin in it, so typically retailers would make 50 or 60% margin, as would wholesalers, but we took a different approach. We operate with an entrepreneurial mentality – we operate with much lower margins and pass those savings onto consumers.

DN: Given the pandemic causing a lot of stress for many people, a good night’s sleep is more important than it ever was. Are mattresses sales booming because of that? I would think the pandemic has probably been bad news for traditional mattress stores but has been good for a company that primarily sells mattresses online.

SB: Yes, from a sales perspective, people are definitely investing more in their homes. That has led to increased demand for home goods. We’ve seen our sales increase exponentially. Many brick & mortar stores closed for months and the e-commerce companies we serve were really the beneficiaries of that. We certainly saw an early shift to e-commerce, but even as the brick & mortar stores began to reopen, Classic Brands sales have been encouraging there, too. Pre-COVID, 80% of mattresses were still purchased at brick& mortar stores because people like to go in, lay down on them, and find out which is best for them. However, the fastest growing segment is currently e-commerce and that’s where we’re best positioned.

DN: Do you have any new products you’d like to share?

SB: We introduced a three-model Hybrid Infinity Collection. Later this year, we’ll be expanding that to six. We did that in collaboration with a leading mattress retailer in Los Angeles. It includes mattresses ranging from 10 to 15 inches high, all of them packaged for easy delivery, with a guaranteed 365-day in-home trial. I think the most notable facet of the collection, though, is that we’ve developed the industry’s first turnkey omni-channel bedding program offering a diverse set of hybrid mattresses alongside a website, TV commercials and a social media program that can all be launched within five days. It’s important because many traditional mattress retailers have struggled with building their online capabilities while keeping a successful in-store operation. We think we’ve developed a great solution for retailers around the country. It’s an exciting development. We are also expanding into broader home furnishings including bedside tables and other bedroom furniture. We’re getting great response to those, so you’ll definitely see a lot more Classic furniture to go along with the mattresses.