BusinessReport.com

Lee Burns is a mattress expert, or so claims his business card. As such, he can rattle off statistics that one might expect a 'mattress expert' to know: People typically buy a mattress every 10 years. They are less likely to return a Serta mattress than any other brand. And so on.

Turn over the card, though, and it's his business savvy that stands out. Mattress Direct locations across south Louisiana fill the back of his card. He's opened six since his first store off Bluebonnet Boulevard in 2001- and five of those since last June.

Surely Burns' knowledge of mattresses explains part of the fledgling sleep shop's success. After all, who would buy a mattress from someone who didn't know the importance of coil counts?

As valuable, though, is the exclusive agreement between Mattress Direct and Serta Inc. No franchise fees or cuts of revenue exchange hands.

'It's basically a franchise without a franchise fee,' Burns says. 'It's a new age of mom-and-pop shops.'

Mattress Direct benefits from Serta's national ad campaign- more than $20 million annually spent on counting sheep- and lower costs due to the volume it purchases. By committing to one product, the local sleep shop can display the fraternity house model, the penthouse model and everything in between.

Allying with locally owned sleep shops lets the Serta brand name profit from the atmosphere and care that often gets lost in national chains.

'Producers do like to have retailers only selling their lines because it's a strong presentation of their line,' says David Perry, executive editor of Furniture Today, a weekly business newspaper for the furniture industry.

Kally Reynolds, director of communications at Serta, refused to comment on its business strategies, including single-vendor agreements.

But Burns says Serta recognized the trend and, rather than collect franchise fees or cuts from each sale, began creating alliances with local sleep shops across the country. Indeed, they even created a division of its sales force to focus solely on growing sleep shops.

'They believe that a local person will do better for the community,' says Burns. 'It's the best of both worlds. Our stores have got a corporate feel and corporate pricing but a down-home feel.'

Perry isn't totally sold on the idea of a sleep shop tying itself down to one vendor. The majority of retailers, Perry says, would prefer to be a multi-vendor.

'One argument against a single vendor is that you have no other brand to absorb any promotional pressures. If you have two lines, for example, you could sell Sealy for less and Serta for more, if you use a loss-leader concept.'

Yet Kristy Reynolds, an associate professor of marketing at LSU, says Serta's national ad campaigns give Mattress Direct a 'huge advantage' over retailers who are unable to tout a nationally recognized brand name. Such arrangements, Reynolds says, are normally used to retail higher end products

'With mattresses it's kind of interesting. It's not really a product like Tag Heuer watches. Usually, if there's a certain arrangement in a geographic area, it's a high luxury item.'

Even with Mattress Direct's exclusive relationship with Serta, Burns' quick success begs the question: How do you go from an out-of-work salesman to owner of seven stores across south Louisiana in three years?

Three years ago Burns was jobless following a merger between Baton Rouge-based Go Antiques and Antique Networking Inc., of Columbus, Ohio. He talked to many of the national bedding manufacturers about a sales job- he had experience as a representative for Serta- but wanted to stay in state. In the process, a Serta sales manager gave him an opportunity to start a Serta-only retailer in Louisiana.

In 2001, Source BIDCO, a local venture capital company, helped Mattress Direct gets its start with a substantial loan, which was coupled with initial capital put forth by Burns to open the first location. Burns declined to provide financial numbers.

Mattress Direct entered the Lafayette market three months after opening its first location in Baton Rouge. In 2003, Serta pushed Mattress Direct to open in the New Orleans area, and Burns brought on a partner, his high school buddy Ty Hingle. Hingle runs operations for the New Orleans arm of Mattress Direct.

The business now has locations in Baton Rouge, Lafayette, Metairie, Covington, the West Bank and Houma. Starting a company in a down economy, Burns points out, forces the company to grow more responsibly.

'It's allowed us to grow in a more price-conscious way,' Burns says. 'For us, we've grown in that economy, and it's allowed us to grow our company at a better rate.'

Burns is a sales veteran. In addition to his stint as a Serta representative, Burns worked at Montgomery Ward and Olinde's Furniture during college, giving him the chance to observe how his employers ran their businesses.

When he opened Mattress Direct, he already knew what worked for those companies and where they went wrong, he says.

Focus periods between store openings help Burns tweak all aspects of his company model- from infrastructure to delivery, from advertising to training and purchasing. Burns measures everything to make sure he is on top of his business. His wife, Kim, runs the accounting side of the business, all of which is done in-house.

'It allows me to do what I do best: selling and working with people,' Burns says.

Mattress Direct has been able to drive down the cost of opening a new location by increasing efficiency and already having the general infrastructure in place. Plans for more expansion are on hold now while the company undergoes one of its focus periods, but Burns isn't ruling out more Mattress Direct locations around Louisiana and on the Gulf Coast.

The mattress expertise of Mattress Direct might be limited to south Louisiana for now, but Burns has demonstrated marketing skills that are getting notice nationwide.

Perry, the resident bedding guru at Furniture Today, knows of Mattress Direct- Burns recently sent him a copy of an ad for their fire safety day. Serta is the only national bedding brand that sells open flame fire- resistant mattresses, Perry says. The ad invited customers to meet firefighters at seven locations and enjoy discounts on fire-resistant products. The ad never mentioned prices.

'That is a brilliant marketing move,' says Perry. 'It's the kind of effort that a number of retailers across the country could use. It is a responsible way to approach what can be an emotionally charged issue.'