Change is the only constant in life yet it becomes difficult for many brands, especially legacy players such as mattress brand Kurlon. Currently, owned by the parent company of Sleepwell Mattress, Sheela Foam, the rebranding exercise has been undertaken after one year of the acquisition. While some industry experts would call this move, the need of the hour, for a few this was a bold move as it pits the revamped brand against many direct-to-consumer brands, present online. “It’s a 60-year-old brand, therefore, when we were going through the process of evolution, it was important to maintain its legacy and assets. For example, two colours red and white are strongly associated with Kurlon. We wanted to retain these colours because our consumer base identifies with them strongly. However, at the same time, incremental changes were required to appeal to newer consumer segments, such as millennials and Gen-Z, who are entering this category for the first time. The goal was to give the brand a refreshed, more modern, minimal look so newer consumers could connect with it,” Nilesh Mazumdar, CEO – India, Sheela Foam Ltd, told BrandWagon Online. Moreover, over a three-year timeframe, the company at its level is aiming for a CAGR growth of about 15%.
Last July, Sheela Foam acquired a controlling stake of 94.66% in Kurlon Enterprises, maker of Kurlon mattresses, at an equity valuation of Rs 2,150 crore. Interestingly, at the time of declaring its Q4 FY24 results, Amit Kumar Gupta stated that Kurlon achieved more than a seven per cent EBITDA margin for the fourth quarter of FY24. “This is double the margin that we acquired in the third quarter. Kurlon is on line to achieve our stated goal of Rs 1,000 crore topline and Rs 100 crore EBITDA as a starting point,” Gupta said during the analyst call.
The Concept = the approach
Industry experts opine the hardest step for any legacy brand going through a revamp process is to take any drastic step, and create a new identity, which may later become difficult for its consumers to identify with. Hence, it is here that SheelaFoam claims to have maintained a balance between old and new. “The way we approached it was to retain the colours. But at the same time, we introduced a gradient line. The old Kurlon brand logo had a very bold line on top. We tweaked that line, making it more colourful with a gradient that moves from light blue to orange. The thought and philosophy behind this was ‘from dawn to dusk,’ because a mattress is not only for sleeping; there’s a whole life beyond just sleeping on it. This idea was captured in the symbol of dawn to dusk, which we introduced by making this small tweak in the colour gradient,” Mazumdar added.
Meanwhile for Ogilvy India the task set out was simple, the new brand should carry forward the strengths of the old brand. For Piyush Pandey, chief advisor, Ogilvy India, it’s vital to preserve these strengths, as losing them could result in a significant loss of brand equity. “Changes are often necessary when refreshing a brand to stay relevant and meet audience demands. This process is akin to what Tata has done; as a brand over a hundred years old, Tata continues to innovate while maintaining its legacy. Brands from the same house, such as Titan and Starbucks, draw strength from this legacy, remaining relevant and refreshing. These brands resonate with me because they accomplish two things: they instil trust through their longstanding presence, and they captivate with their refreshing updates. This combination makes them appealing and trustworthy. It’s as simple as that,” Pandey explained.
Pandey who is known for his legendary creative work for brands such as Fevicol (Pidilite), and Cadbury (Mondelez India) believes in a single-minded focus approach. “We’ve aligned everything with this single-minded approach. We’re now transitioning from the comfort of our other brands to highlighting the joy of sleeping on a Kurlon mattress. This differentiation strategy will distinguish between the two brands owned by the company,” he noted.
SheelaFoam in the meantime claims that for the brand and the campaign, the entire approach was to offer a unique perspective on the category. While everyone talks about mattresses for sleeping, a well-known fact, the company claims that it didn’t feel the need to emphasise that to consumers. Instead, the consumer insight revealed that people use mattresses for much more than just sleeping; they sit on them, watch television, read, and engage in various activities. “Therefore, there’s a whole life beyond sleeping that we wanted to capture. This idea was creatively encapsulated in the campaign line ‘Life banegi Hula Hula,’ where ‘Hula Hula’ signifies the fun and joy one can experience on a mattress,” Mazumdar said.
Currently, the mattress market in India is valued at $254.60 million, as per the latest report by Statista, a market research firm. According to projections, the market is expected to grow annually by 4.86% (CAGR 2024-2029). When compared globally, the United States generates the highest revenue in this segment, reaching $13,010 million in 2024. Considering the total population, per person, revenue amounts to Rs $0.18 in 2024 in India, the report further stated.
As per the report, India’s mattress market is experiencing a surge in demand for orthopaedic mattresses, driven by a growing awareness of the importance of good sleep and spinal health. “The competition in the mattress market is certainly humongous. There are brands and other brands offering that cater to every price bracket. Therefore, if a player needs to stand out, it is important to take the macro view and not the micro view. Gone are the days of product-specific talks, which focus on smaller improvements One needs to talk about the big story. And the big story is sleep. The way Kurlon defines sleep is going to define success,” Harish Bijoor, business and brand strategy specialist and founder, Harish Bioor Consults Inc.
The growth factor!
For the fourth quarter of FY24, on a consolidated basis, the company reported revenue of
Rs 845 crore, which increased by around 16% year-on-year. EBITDA for the quarter was
Rs 81 crores which grew by about three percent year-on-year, while EBITDA margins were reported at 9.53% for the quarter, as per the filings and data retrieved from the transcript of the analyst call. Net profit stood at Rs 65 crore, which was up by about 49% for the quarter. In FY24, the company’s consolidated revenue was up by 3.8% on a year-on-year basis to Rs 2,982 crore. The EBITDA was flat on the year at around Rs 300 crore, with EBITDA margins reported at 10%. The net profit was reported at Rs 184 crores, thereby declining by about 8.4% year-on-year. PAT (profit-after-tax) margin stood at at 6.17%. On a stand-alone basis, the company’s revenue stood at Rs 487 crores, thereby by declining by six per cent year-on-year. EBITDA for the quarter stood at Rs 50 crore, down by about 14% year-on-year. EBITDA margins were reported at 10.31% for the quarter. Net profit stood at Rs 56 crores, which was up by 35% year-on-year.
Furthermore, for FY 2024, the stand-alone revenue was down by 7.8% year-on-year
at Rs 1,880 crore. The EBITDA, however, was flat at around Rs 210 crore with
EBITDA margins reported at 11.2%. Net profit declined by 1.7% on a year-on-year basis to
Rs 168 crore with PAT margins at 8.95%. The company further stated that while its flagship brand Sleepwell mattress registered a volume growth of 31%, the Kurlon brand mattress registered a volume growth of 17% in Q4, 24. “Both brands are considered iconic and will be widely available across the country. While their current strengths may be more pronounced in certain regions, our goal is to ensure a strong national presence for both brands, catering to various price points in consumers’ perceptions. Going forward, we will work on positioning each brand uniquely,” Mazumdar explained. He however, agreed that last year has been a bit
turbulent for the company as it took certain initiatives like discontinuance of the online
brand SleepX besides other flanking brands like Featherfoam and Starlite and shifting the Sleepwell brand in the online segment. “This impacted our top line for some period but we have seen fairly healthy performance in both of its flagship brands,” he noted.
As per the company, the total market size at the consumer price point today is about Rs 15,000 crore. Combined, both brands hold approximately 29% market share. According to Mazumdar Kurlon is particularly strong in the South and East, while Sleepwell has a stronghold in the North and West, although both brands have a presence across the country. Mazumdar interestingly, calls this complementarity crucial as far as the company’s strategy is concerned. Agreed Pandey, who further cited the example of Cola drinks. “So, it’s almost like Coca-Cola and Thums Up. Both are in the same category, yet they coexist and expand the market significantly for the manufacturer,” he noted.
Moreover, in the future, the company wants to grow both brands across the country and plans to invest in all markets. In terms of pricing, it further claims that both brands will cater to all price points, offering mattresses ranging from as low as Rs 8000 to premium ones priced at Rs 1 lakh. According to Pandey, this strategy aims to address every consumer segment in the market today.
The company which runs its retail outlets claims that multi-brand retail outlets account for most of its sales. “ We will have a combination of both exclusive brand outlets and multi-brand outlets. Exclusive brand outlets offer a unique consumer experience beyond just sales; they contribute to the brand experience process. On the other hand, multi-brand outlets have created franchise stores in the market and are important for reaching consumers where footfall is high. In the future, we aim to maintain a balance between the two types of outlets to enhance our brand presence and consumer engagement,” Mazumdar said.
According to industry estimates, online sales currently make up around 14- 15% of an industry level, with a focus on the economic end of the market. Experts opine that this is because customers buying higher-priced mattresses above Rs 15,000 or Rs 20,000, prefer to physically experience the product before purchasing. As a result, the majority of online sales are in the price range of Rs 7,000-8,000. “Our online sales account for approximately 10-11% of our overall sales since we have a stronger presence in offline retail,” he added. The company currently claims to be present across 3,000-3,500 stores, primarily through multi-brand outlets. The total number of exclusive brand outlets is about 450-500.
Over the years, the Indian mattress market has seen the entry of many direct-to-consumer brands, however as touch-and-feel factors play a critical role in the purchase of such products, often online players are forced to move offline. For example, the D2C brand The Sleep Company also runs a series of experience offline stores. “The mattress market undergoes a very slow replacement cycle and this remains true for brands of mattresses too. People tend to use it for a long time and a full generation goes through without a replacement. Therefore any brand which looks at a revamp needs to look at its existing users and the next generation of users. Thus for a mattress player legacy is a better tag,” Bijoor added.