In our latest blog post we interview a client that’s been with us for almost 25 years, Larry Miller. Here, we discuss how he started Sit ‘n Sleep, the future of the company, and the changing landscape of the mattress industry.
(WINGMAN) TELL ME A LITTLE BIT ABOUT YOURSELF AND HOW YOU STARTED SIT ‘N SLEEP?
(Larry Miller) My name is Larry Miller, I’m the President and CEO of Sit ‘n Sleep. In 1980, my father and I started Sit ‘n Sleep and its original name was Rivera Convertible Sofas. I put in $10,000 that I borrowed from an aunt and my Dad put in $10,000 he borrowed from the bank. It was a business that was designed to sell futons, day beds, and sofa beds. We sold no mattresses, at that time. I slept on futons in Japan in 1971, ’72.
I thought the futon would be a great thing to bring to America and sell here and, somehow, God blessed me, and I was right.
“The first year of business we did $200,000 in volume. I made $9,000 for the whole year. It was a very humble beginning.”
Fast forward to 2014, we did $113,000,000 and we expect to do in excess of $120,000,000 this year. So things have changed a lot in the life of the Miller family.
My father and I struggled in business for a good number of years. The first 15 years were blood and guts. It was difficult. We advertised in the LA Weekly, The Herald Examiner, and very little else. Eventually, we began to expand our advertising efforts. In about 1985, we found KABC Radio. A friend of my dad’s, Wally Sherwin, was the Program Director.
He invited us to an opening-day Dodger game. We had a wonderful time. He said you should go on the radio and I looked at him and looked at my Dad and started laughing. I said, “We don’t have any credit. If you want to give us credit, I’ll come on.” He said, I’ll vouch for you. Give it a try.”
So, we went on the air for four over-nights on “The Ray Briem Show.” Eventually, we started getting business from his referrals and began expanding the number of shows we would advertise on. As time went on, we started improving little by little.
Later, I started complaining about the advertising. The personalities read them without much passion. So the Program Director said, “Well smart ass, why don’t you come in and do it yourself?” So, eventually, I got so embarrassed I had to come in and do it myself. It was an absolute disaster. I stunk. I was pathetic. I took a half hour to do a 60-second spot and I was beside myself. Anyhow, I croaked it out and eventually got a little better and a little better.
I started experimenting with some other radio stations and began to build the business. I might have hit $1,000,000 in 1990.
So, it was still a very small business. At the end of ’91, I met a guy named Rich Kagan. Rich Kagan tried to sell me air time on a show called “The Howard Stern Show.” I hadn’t heard much about him and I started to do some research on this character, Howard Stern. I started listening. I thought, this cats dirtier than crap (laughs). But I kind of like him.
I told Rich, “I don’t know if I can advertise on his show because people might get upset at work. We have a lot of women customers…” But Rich kept coming back and coming back and coming back. After about the tenth trip into the store he still wouldn’t take no for an answer.
(WM) WHAT HAPPENED ON THE ELEVENTH TRIP?
(LM) It was a hot summer’s day. I’ll never forget it. Once again, he got “no” for an answer. After that, he got packing, as usual. He came back about 30 minutes later, and he was in tears. His clothes were a mess, his tie was askew, and he said, “You won’t believe it, someone broke into my car and stole my briefcase, they stole everything. I said: “Oh my God, you poor son of a b***h.”
I asked him to sit down and gave him a glass of cold water. We didn’t even have air conditioning back then. That’s how broke we were. It must have been 100 degrees that day. I felt so bad for him, I decided to place a sales order on the Howard Stern Show that day. Well, that was the luckiest order I ever put in.
(WM) HOW DID THE HOWARD STERN SHOW PAN OUT?
(LM) “The Howard Stern Show” built our business by 100% that year. At the end of ’92 we were a $2,500,000 business. We decided to expand our advertising to TV and sure enough we went on to become a $5,000,000 business. And it was off to the races from then on. We started making money after that. I’d say that was the first year I made $100,000 in my life and, you know, I’ll never forget that.
It was a pretty good feeling to go from $9,000 a year to $100,000 a year. Over that period of time while I was working with Rich, I met another fella named Steve Dubane. We all became really good friends. They became kind of like my advertising consultants.
Around that time, Steve and Rich had left to start their own advertising agency, Wingman, and Sit ‘n Sleep became their first client. After all that they did for me and my business the least I could do is give ’em a shot.
That was a fortuitous move, because not only were we friends, which we still are to this day, but they helped my business in a huge way. Shortly after that, I had bought my father out of the business and we opened a second and third store.
Before I knew it, Rich and Steve had helped me grow Sit ‘n Sleep to over 33 stores. Now it’s a $120,000,000 business. They’re bright and capable; always coming up with new ideas and new ways of doing things. They helped shepherd me into e-commerce and they helped modernize my business. Of course, there has been a lot of hard work on our part, but having great partners like Rich and Steve have made a huge difference in my business.
(WM) JUST CURIOUS, WHEN DID YOU STOP SELLING FUTONS AND START SELLING MATTRESSES EXCLUSIVELY?
(LM) It was so long ago, probably 1995 that we stopped. I realized it wasn’t a long-term play. We started selling mattresses fairly quickly in year four or five. I realized futons were not going to be there the rest of my life. They’re like waterbeds. They would soon phase out.
(WM) WHAT SEPARATES SIT ‘N SLEEP FROM OTHER MATTRESS STORES ACROSS THE COUNTRY?
(LM) Well, mattress stores generally have only three or four brands. Sit ‘n Sleep has every major brand sold in America. Most normal mattress stores do between $600,000 and $800,000 a year. We have 33 stores in Southern California and make roughly $4,000,000 a store. Some small stores do a little bit less and some do as much as $9,000,000. Most mattress stores are under 3,500-square-feet and have 40 or 50 mattresses. Our stores average 10,500-square-feet and we have 150 mattresses on display at each location. Each one of our sales staff sells more than our competitors’ mattress store does.
We continue to push the boundaries on our creative for TV, radio, and Internet. We’re constantly evolving and changing. We’re very mindful of investing in our business. We push things to the edge and fail sometimes. But with Steve and Rich’s help, we’ve succeeded a lot more times than we’ve failed.
“If you don’t make mistakes, you’re not running a business.”
In marketing and retail you’re going to make mistakes. Just don’t make the same mistakes twice. We stand by our wins and minimize our loses.
(WM) WHERE DO YOU SEE THE MATTRESS INDUSTRY GOING IN THE NEXT 5 YEARS?
(LM) I think, there’ll be a lot more motion products and adjustable beds being sold. There should be new services introduced. For example, Tempur-Pedic has just introduced a hybrid called the Flex. Different types of foams are being introduced as well as new types of coil systems. We have foam coils now. There’s going to be many different types of experiments and some of them will work really well and some will not.
So, we have to embrace experimentation and try to introduce new and improved ways of sleeping. I think consumers are becoming more and more aware that sleep is an intrinsic part of health and without a good night’s sleep, we can’t be healthy. I think that mattresses are becoming more and more important to the consumer.
“We really spend a third of our life in bed so it’s become more and more important. We will sleep on it, walk on it, hop on it, watch TV on it, use our computers on it, make love on it, and sometimes we die in it. Selecting a mattress is a very personal decision.”
I think that we’re on the forefront of technology, both on the Internet and in-store. Sit ‘n Sleep has tried to enhance the mattress selection process with our Body Diagnostic and Bed Match system. Nobody really has anything like it in the industry. We try and consistently give the consumer a unique experience with our technology and mattress selection. If we don’t give our consumer an overpowering reason to come in and buy a mattress then we don’t deserve their money… and then we have to deliver on it. You have to make your promise, and you have to deliver on it. You know, I would be very sad and very disappointed if we couldn’t deliver on all of our promises.
(WM) WHAT WOULD YOU SAY A TYPICAL SIT ‘N SLEEP CUSTOMER LOOKS LIKE?
(LM) A lot of people have been listening to my advertising since they were kids. People have grown up seeing our ads so they’ve becomes part of Southern California culture. The people know who we are, they trust us because we have a good reputation, and we care about the community. We donate a lot to the community. So, we really try to be more than just a store to buy a mattress. We’re a part of their lives and that’s what we want to be. It’s more than just a mattress store.
(WM) LOOKING BACK ON EVERYTHING, WHAT DO YOU WISH YOU WOULD HAVE KNOWN BEFORE YOU STARTED YOUR BUSINESS? IS THERE ANYTHING THAT YOU WOULD HAVE DONE DIFFERENTLY KNOWING WHAT YOU KNOW NOW?
(LM) I would probably say that I was stupid because I didn’t know anything about the industry like I thought I did. I didn’t know how hard some things were going to be. Had I known it, I probably would have been a little more open to listening to others rather than trying to do everything on my own. The business has taught me to dream and reach for the stars and, you know, we might as well.