Select Comfort Corp. (SCSS)

millionairefools (99.54) Submitted: 12/15/06 1:51 AM : Start Price: $19.31 SCSS Score: -62.89

SWOT (Strengths, Weaknesses, Opportunities, Threats):
S : This surely is one of the leading brands of premium mattresses; one of the big three. Another advantage of the category is that someone who is investing in a premium mattress will not go for an unknown name all of a sudden so there's an industry semi-moat here. Doesn't mean that they don't have to fight tooth and nail with Sealy's and Tempur-pedic - but saves a little headache. Great products - I haven't heard of anyone who has used the bed and is not satisfied.
W : The beds last 10 years. 10 YEARS! Which means that for the company to grow, they don't get revenues from existing customers - they have to keep finding new customers. I think they should have a strong referral program to overcome this. Other than that, it is a stellar company.
O : This is a very good baby-boomer play. People with cash sloshing around in their pockets will like to splurge on a premium mattress when they reach an age where they trade fashion for comfort. Also, this is not a mainstream industry yet and has good chances of becoming one. Also, commercial use is not so common yet and that if exploited should be a great opportunity.
T : If they keep their advertising in 70's like the way they have now, it can't be any good.

If I were the SCSS big man, I would do these things to make a bigger footprint...
(1) Get more businesses/hotels to use it - it makes much more sense for them as it requires less upkeep and is a good selling point
(2) Sell it to airlines - same idea as above, but start making Sleep Number chairs. It should be a hit in business class at the very least
(3) Don't limit the brand to bed - extend it to offer it as part of other furniture, like chairs. If I were 75 and I had money, I would want a fancy comfortable easy-chair.
(4) OVERHAUL the advertising so it doesn't seem that I am selling a medicine.
(5) Sell it more as a luxury item to niches as opposed to comfort item. Even if people don't need it, doesn't mean they shouldn't want it!

Okay, my fee for the advice would be 50% annual returns for next 5 years. Starting now!

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