Serta China and King Koil China to create a leading player in China’s premium mattress industry
Shanghai, 24 October 2018 – Serta China, a principal player in the premium mattress market in China, and King Koil China, a premium manufacturer and retailer of mattresses, today announced a partnership to become a leading player in China’s premium mattress industry with support from Advent International.
Advent International, one of the largest and most experienced global private equity investors and a majority owner of King Koil China, provided financing to support the transaction. Serta Simmons Bedding, the largest distributor and manufacturer of mattresses in the United States in which Advent International has a majority ownership position, granted a new Serta license to the new venture and has acquired a minority interest in the same. Financial terms were not disclosed.
Gary Chu, former President of General Mills Greater China, will join the Board of the newly created company formed by the partnership. Gary will leverage his decades of consumer brand investment and operations experience, focusing on marketing, distribution and supply chain synergies between the two companies and leading a new growth phase for the two brands. The newly created company will serve as a holding company for Serta China and King Koil China, which will operate independently and retain their brand names.
China’s mattress market is expected to grow by 10% over the next few years with the premium segment growing more than 20% due to an expanding middle class and increasing demand for high quality sleep products, according to industry analysts. The new partnership combining Serta China and King Koil China is well-positioned to take advantage of this growth. With a multi-brand portfolio offering and a complementary manufacturing footprint in Shanghai, Chengdu and Huizhou, Serta China and King Koil China will leverage improved logistics and supply chain efficiencies while continuing to provide premium products and a quality experience for consumers. The platform will establish a strong presence across all distribution channels in China, building on the brands’ complementary positions in the business-tobusiness (B2B) and business-to-consumer (B2C) online and offline distribution channels.
Established in 1931, Serta has ranked amongst the top mattress brands in the United States in terms of sales volume in recent years. Serta entered China in 1998, with Airland Group as one of its licensees, after discovering that the market was starting to boom due to rising incomes and people’s desire to have a higher quality of life. Airland Group became the exclusive licensee in 2009 and grew the Serta China business, which has innovated on multiple marketing models and became a leader in the Chinese mattress market with more than 1,400 retail outlets in over 400 cities. China has been Serta’s second largest market behind the United States.
Established in 2000, King Koil China is the exclusive licensee of King Koil and several other international premium mattress brands in China. With a comprehensive channel system of over 420 retail outlets in 200 cities, the company is a leading brand in China’s premium mattress market, the premier player in supplying superior sleep products to luxury hotels in China, and also a leading operator in the online premium mattress segment.
Stephen Wang, CEO and co-founder of King Koil China, said, “Since Advent’s investment in King Koil China, we have substantially expanded our number of outlets and franchisee partners, and opened a new manufacturing plant in Shanghai, allowing us to further increase our footprint and market share in the premium mattress segment.”
“We’re extremely excited about our new partnership with Serta China, which already has an impressive share of the B2C offline mattress market in China. The new combined platform will support an enriched choice of products for Chinese consumers and an expanded family of quality brands in the rapidly growing mattress market.”
Mr. E. Wu, General Manager of Serta China, commented, “We greatly look forward to this new venture with King Koil China. King Koil China has a large market share in online channels and in supplying mattresses to luxury hotels, which would be complementary to Serta China. The partnership presents exceptional future growth opportunities for our employees, distributors and suppliers and will offer expanded choice and value for our customers. We are thankful for the support we have received from these stakeholders and are excited about future growth with the Serta China and King Koil China brands together.”
Mr. Sze Man Yuen, Chairman of Airland Group, said, “We are thankful for Serta’s recognition of the China business and its management team. Our former partnership with Serta reflects Airland Group’s ability to help international brands build a strong presence in China. We believe all parties have enjoyed mutual benefits from the partnership and the new owners and operators will grow further from having such a solid foundation.”
“We would like to express our gratitude towards Mr. Sze of Airland Group and his team for their excellent work as caretaker of Serta China,” said Michael Traub, CEO of Serta Simmons Bedding. “We are excited to be able to offer our Serta brand as part of our investment in this new business in China. This joint venture has a unique advantage in terms of brand positioning, channel expansion and market distribution.”
Andrew Li, Managing Director and co-head of Greater China of Advent International, commented, “Serta China and King Koil China both have strong track records in providing premium sleep products and quality service to customers. They each bring their own advantages to the new platform and have complementary positioning in their geographic presence, channel development and distributor management.”
“With Advent’s extensive experience in the consumer and retail sectors, we look forward to supporting the expansion of the new platform’s product line and the further growth of the Serta China and King Koil China brands, channel, innovation and team, which we consider a priority for the future business.” In line with Advent’s investment strategy for Greater China, the firm invests in leading companies in Greater China, Singapore and selectively in other Asian countries, with a particular focus on the consumer, retail, education and healthcare sectors. Advent has been investing in the retail, consumer and leisure sectors for 28 years and has completed 77 investments in 22 countries worldwide. Relevant current and historical investments in Asia, in addition to King Koil China, include Best Learning, an English language training institute for juniors in China; The Learning Lab, a leading provider of K-12 academic enrichment and tutorial services in Singapore; and International Coffee & Tea, which operates The Coffee Bean and Tea Leaf.
About Serta China
Serta entered China in 1998 and has grown into a leader in the Chinese mattress market. Serta China is the exclusive licensee of the Serta Brand in China from Serta Simmons Bedding. The number of Serta branded outlets in China was more than 1,400. Serta China has 4 product series to cover different consumer groups, namely Serta Gallery (high end prestige import mattress), Perfect Sleeper, Serta Life (total bedroom solution) and Serta Junior.
About King Koil China
Established in Shanghai in 2000, King Koil China is a manufacturer and retailer of premium mattresses. It is the exclusive licensee of King Koil and several other international mattress brands in China. King Koil, a leading US brand founded in 1898, is one of the best-known premium mattress brands globally and has received many prestigious distinctions, including the exclusive endorsement from the International Chiropractors Association (ICA).
About Serta Simmons Bedding
Serta Simmons Bedding, LLC is the leading sleep company and the largest manufacturer, marketer and supplier of mattresses in North America. Based in Atlanta, SSB owns and manages the two bestselling bedding brands in the mattress industry: Serta® and Beautyrest®. The brands are distributed through national, hospitality, and regional and independent retail channels throughout North America. SSB also owns Tomorrow® and Tuft & Needle®, direct-to-consumer mattress brands. SSB operates more than 30 manufacturing plants throughout the United States and Canada.
About Airland Group
Founded in Hong Kong in 1966, Airland Group has over 50 years of hard work and dedication. The company’s scope of operations includes but is not limited to the manufacturing and sales of household products (mainly mattresses and bedding products), luxury sleep centres, production management, real estate development, hotel management and health care centres. Airland Group has focused on quality and attention to detail which has successfully established AIRLAND as a well-known brand on a global scale, and has established the China operations of many international brands.
About Advent International
Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in 340 private equity transactions in 41 countries and as of 30 June 2018 it had $41 billion in assets under management. With offices on four continents, Advent has established a globally integrated team of more than 190 investment professionals across North America, Europe, Latin America and Asia. The firm focuses on investments in five core sectors: including business and financial services, healthcare, industrial, retail, consumer and leisure, and technology, media and telecom. After more than 30 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.
For more information, visit www.adventinternational.com