End of an Era

How long does it take to kill a profitable company with fifty million dollars in revenue? In the case of United Sleep Products, the answer was just more than one year.

Last April 28, I posted about the company’s new marketing strategy under new ownership – a strategy that went against everything the company had ever done, everything its dealers had ever asked it to do and everything it knew how to do well. In short, it was kind of like someone buying a successful used car lot and announcing that you’re going to leverage the location to sell Ferrari’s.

Guess what? It didn’t work, and United failed miserably. They announced dramatic restructuring in January and even brought back John Katerenchuk, a very talented man I’d worked with at United. But I know John well enough to know that he knew he was walking into a dire situation. Even then, I suspect the plan was to keep operations alive until a sale could be made.

A few weeks ago the plants closed, and shortly after that a company down south announced plans to acquire the ashes. DISCLAIMER: I know zilch about Park Place, the company that bought United, other than they’ve been in the mattress business a lot longer than the people who screwed up United.

Initial plans make it sound like Park Place intends to maintain the USP brand name in the Northeast. On the surface, I wonder if that’s a good idea… can the brand really still be worth anything in dealers’ minds? But if it is, I suppose that’s proof that – for a while – USP did a good job of providing “Brand Name Quality for LESS.” Well, at least until 13 months ago.

United isn’t the first former employer I’ve had to vaporize. In fact, they’re the fifth. However, three of the other four were the victims of simple acquisition and the fourth was a very small start-up company run by one very unscrupulous person. United Sleep Products is the only profitable company I’ve been able to watch commit corporate suicide and while I watched (gratefully) from afar, it wasn’t a pretty sight at all.

However, because the company did employ me for more than five years and because I was the only one who actually gave the company a "voice" during my tenure, I think it only fitting that I write a small obituary. So, if you're so inclined:

Word was received today on the death of United Sleep Products. Though the company had roots dating as far back as the 1950's, the brand was about 14 years old. The cause of death was multiple traumas, including:

1) Loss of key personnel

2) Excess weight. In fact, more than a million dollars worth.

3) Complete stupidity.

Though many are saddened by the loss of USP, its demise - not unlike Lindsay Lohan's - was very public. The company's own website seemed to mark the decline, as each relaunch (2005) somehow seemed to look worse (2006) than the last (2007).

As with any corporate death, thankfully there are survivors. They include former and current employees, some of whom will remain with the factories.

Comments

  1. Jim Gardner12:39 PM

    Marcus,
    Don't forget the company you worked for who introduced you to the mattress business. Gardner's Bedrooms is the one company who has grown and prospered since you were here because we haven't lost our focus on customer satisfaction.We still offer Brand Name For Less even though we haven't carried United Sleep Products for some time. Maybe you want to try some of those special "summer hours" again, working for someone who still knows how to listen to their customers.
    Love you article.
    Jim Gardner

    ReplyDelete
  2. Paul4:22 PM

    Marcus,

    Well I don't like to say I told you so but......you did reference my comment some time ago; that the change of direction could prove to be the undoing of USP.

    It did not singularly do that though. As I see it, it started before the sale of the company when there were changes in policies regarding controlling selling expenses and adding to the futon inventory. Then came $4000 mattresses. Then came the introduction of an import pillow program at a time when they were losing significant sales volume. Then came even more selling expenses with big Las Vegas parties. The net result was less working capital to support a higher debt structure on less sales volume.

    You have heard me quote Mr. Shakespeare. "To thine own self be true". That sums up what happened to USP. Nobody was true to the slogan "Brand Name Quality for Less".

    I am truly saddened by what has happened. You and I and many others put a lot of effort into growing that business and we can still be proud of what we accomplished. It is a travesty what happened to it.

    Hopefully Park Place will be able to resurrect sufficient volume to keep most of the great people that worked there.

    Keep running.

    Paul Sullivan

    ReplyDelete

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