“We are very excited to acquire 100 per cent of Casper’s Canadian retail business, who invested over $1 billion globally to build a leading brand that elevated the importance of a good night’s sleep for all. With their omnichannel business, and their mission to deliver a frictionless and elevated sleep retail experience, they align perfectly with our strategic omnichannel journey that began four years ago,” said Stewart Schaefer, President and CEO of Sleep Country, in a press release.
“Casper, combined with our entire house of other leading brands like Tempurpedic, Sealy, Kingsdown, Endy, and many others, reinforces our 29-year brand statement of “Why buy a mattress anywhere else?
“We look forward to growing Casper’s brand in Canada to make the newest member of our family of brands more accessible to all Canadians in a seamless manner that will exceed our growing customer expectations. We are excited to continue working with Casper Sleep Inc. as they continue executing their long-term strategic growth plan.”
Casper has six physical stores in Canada. Toronto, North York, Etobicoke, Newmarket, Vancouver and Calgary.
“It will be business as usual with no immediate changes,” shared a statement by the brand. “The Casper Canada team will continue to support Canadian customers in Casper stores and its omnichannel business and help ensure the authenticity of the Casper brand in Canada.”
Sleep Country said it will pay US$20.6 million at close, receive a cumulative US$4.5 million marketing transition fee from Casper Sleep over the next four years and receive three-year warrants which would convert into about a one per cent stake in Casper Sleep Inc. upon exercise. In addition, Sleep Country invested US$20 million in five-year convertible notes which will have the option of converting into about five per cent of Casper Sleep Inc.’s shares.
In a statement, Emilie Arel, CEO of Casper Sleep Inc., said: “We are thrilled to expand upon our retail journey by partnering up with one of North America’s top sleep retailers. Sleep Country has been a retail mattress legacy for almost three decades, and sharing best practices with this leading retailer only helps accelerate our expertise and rapid growth in the retail omnichannel space.
Sleep Country operates under the retailer banners; Sleep Country Canada, Dormez-vous, Endy, Hush and most recently acquired, Silk & Snow. The company has omnichannel and ecommerce operations including 290 corporate-owned stores and 20 warehouses across Canada.
Casper has a full portfolio of obsessively engineered sleep products—including mattresses, pillows, bedding, and furniture—designed in-house. In addition to its e-commerce business, Casper owns and operates Sleep Shops across North America and its products are available at a growing list of retailers.
Schaefer said very few Canadians don’t know the Casper brand.
“For me, it always comes down to that we need to always be focusing on relevant brands that the consumers gravitate to and we need to build distribution channels to be able to service as many Canadians as possible in the most effective way,” he said. “That’s just a basic understanding that my leadership team knows that we focus on.
“Casper is definitely this brand that came onto the scene about six years ago and spent a fortune in advertising and building really a fabulous brand – a brand that was cool and relevant, a brand that definitely differentiated themselves and elevated the conversation around sleep.”
Schaefer said there was an opportunity for Sleep Country to acquire in Canada ownership of this brand.
“You could ask why would you want ownership of the brand compared to just buying it from them? So we own it 100 per cent. We own the IP, we own the market assets. But we own the ability also to create the products and change the mattresses and the comfort. There is a little bit of difference between the United States and Canada in terms of comfort and what the preferences are in Canada and there also is a benefit to us not importing from the United States where the dollar is at $1.35 and Casper has a nice collection of accessories but we have a broader collection of accessories and I strongly believe that even some of our accessories with the Casper brand will elevate the desire for people to buy the product,” he said. “It’s all about the brand and owning this brand rather than call it leasing I guess. It was a really attractive opportunity on our growth side.
“In Canada, they only have six stores. One in Calgary, one in Vancouver and four in Ontario. And I truly believe that we could grow the physical footprint of it and I also believe as we’ve acquired over the last few years Endy, now Casper, we acquired Hush, we acquired Silk & Snow, some are mattresses, some are accessories, potentially this is a fabulous growth story on the brick and mortar component of combining maybe some of these B2C stores together. Who knows? I haven’t decided upon that yet. But there’s no question in our mind that we could grow this Casper both on the digital side and on the brick and mortar side, which is really our wheelhouse. We can expand the product lineup, we can reduce the costs to the consumer because we could either manufacture it in Canada or bring it in internationally. So there’s a lot of really big wins for our shareholders and our customers to do this transaction.”