2019 has been an intense year for Beter Bed Holding N.V. In this year a number of key and strategic decisions was taken and subsequently executed to ensure a strong and sustainable foundation on which Beter Bed Holding N.V. can build its future. The Management Board is fully aware that these decisions had impact on key stakeholders such as shareholders and employees, though were necessary to safeguard a future.
In the second half of 2018 Beter Bed Holding N.V. announced a mid-term strategy which included a reorganisation for Matratzen Concord. Through this reorganisation 172 stores were closed, 64 FTE were made redundant and the inventory was reduced by € 10 million. At the same time initiatives were launched to change the assortment, refine the marketing and update the visual merchandising within the stores. The reorganisation was finished in time, within budget and delivered the planned reductions in costs. The new initiatives showed some nice encouraging first results, however the results were below the envisioned and communicated plan. This had an impact on other activities within Beter Bed Holding N.V. The negative developments at Matratzen Concord, with its cash losses incurred, resulted in an increased risk exposure for the future of Beter Bed Holding N.V. The liquidity pressure and the foreseen time it would still take to recover, resulted in thorough discussions on different alternatives that led to the decision to initiate a divestment process for Matratzen Concord, which ensured a stable and prosperous future for the remaining businesses of Beter Bed Holding N.V.
Supported by various advisors, Beter Bed Holding N.V. started a well-managed process, in which 24 parties participated, to divest. Through this process and after careful consideration, the Management Board and Supervisory Board have concluded that Magical Honour Limited represented the best option to enable a bright future for Matratzen Concord. In the Extraordinary General Meeting on 26 November 2019 the proposal was accepted by 100% of the votes.
The outcome of the divestment of Matratzen Concord enables Beter Bed Holding N.V. to have more focus on and dedication for its healthy core activities, being Beter Bed Benelux, Sweden and DBC. These activities are well-positioned for growth; they can further accelerate through investments in product, marketing and technology.
Over the summer period, when the liquidity was pressured, Beter Bed Holding N.V. engaged the financing banks and three shareholders in order to ensure enough funding for the period needed for the divestment. The three shareholders provided Beter Bed Holding N.V. with an incremental loan of € 7.0 million, where at the same time the banks allowed Beter Bed Holding N.V. to continue to use the committed and uncommitted facilities. The Management Board and Supervisory Board are very grateful that the three shareholders as well as the banks were willing to provide this flexibility and funding. This enabled Beter Bed Holding N.V. to find the best solution for Matratzen Concord, the remaining activities, all employees and all other stakeholders.
Although Beter Bed Holding N.V. went through a volatile period, the Benelux business has done a tremendous job in keeping the business going. The Benelux business was able to continue to grow revenue and order intake through hard work, attractive new campaigns, new assortments, the implementation of Tempur within the collection and the development and implementation of the TNO tested circular box spring ‘Element’. In 2019 the organisation in the Benelux business has further matured, a Beter Bed Academy was initiated and has gone live and a supply chain project has been conducted. Important steps have been made to further improve our online and omni-channel activities resulting in a very healthy growth again.
Our wholesale business DBC is well underway in positioning itself as a branded international wholesale business with much more content than just M line. The current DBC business showed strong sales results in 2019, mainly driven by the success of M line in both our Beter Bed network as well as with existing dealers. DBC has been able to extend the sales network with new dealers nationally and internationally.
The main drivers of this growth were a result of the adjustments in the assortment, new dealers and smart promotions. DBC has launched a M line web shop in the fourth quarter of 2019 to enable customers to purchase directly with DBC. This is just in the Netherlands for now, however in 2020 DBC plans to go live in Germany and Belgium.
The pipeline of potential new B2B customers continues to grow in the Netherlands as well as abroad. In the fourth quarter of 2019 some new product lines (M line Iconic, Olympic Team NL mattresses as well as a wooden bedframe) were developed and have been successfully released at the IMM in Cologne in January 2020.
In 2019 Sängjätten grew sales, however the Company is currently working on a program which aims to improve the profitability going forward. Main elements of that program are:
- Analysing network and develop view on possible right-sizing of the network.
- Fine-tuning the assortment through collaboration with key suppliers.
- Migration of central warehouse to a hub structure.
- Implementation of a new backoffice system to further reduce overhead.
- Further development of the online presence through the newly launched website/web shop.