Facing increased competition and shareholder pressure to reduce advertising costs, specialty mattress maker Tempur-Pedic has moved to Minneapolis’ Carmichael Lynch as its lead creative agency.
It could not immediately be determined which other shops competed for the business. Acme Idea Company, South Norwalk, CT., was the incumbent. The marketer is known for its "Ask Me" TV campaign in recent years along with the positioning of "The most highly recommended bed in America."
Execs at Tempur-Pedic, which made an acquisition bid for traditional mattress manufacturer Sealy in September, acknowledged in June that the company’s sales were being hit by rivals who are offering new foam-based bed products backed by advertising. At the time CEO Mark Sarvary told investors in light of that, Tempur-Pedic would trim expenses with advertising targeted as a “big” cut. Kantar has reported that Tempur-Pedic has recently spent more than $100 million annually in measured media.
When the company released second-quarter results in July, Sarvary said: “Changes in the competitive environment in North America during the second quarter had an adverse impact on our performance. We are taking actions across our operations to realign our expense structure appropriately. At the same time we are focused on a series of new initiatives designed to strengthen our competitive position.”
Tempur-Pedic execs did not return calls but, in a statement, Rick Anderson, Tempur-Pedic’s North American president, said this about hiring Carmichael Lynch: “The agency’s work for iconic brands such as Subaru and Harley-Davidson struck a personal chord as they built upon each brands’ loyal and fervent owner base to attract new users to each business. We’re confident that they’ll be able to further harness the power of Tempur-Pedic owners to drive our business results.”
In releasing third-quarter results in late October, the Lexington, Ky. company reported an 11 percent decline in mattress sales globally and a 15 percent drop in North America. Tempur-Pedic's stock has taken a hit this year, trading around $26.34 today, down from a 52-week high of $87.43.