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About Tempur-Pedic

Tempur-Pedic's mattresses are made from material that is out of this world. The company manufactures premium, pressure-relieving, temperature-sensitive mattresses, pillows, and other sleep products made from viscoelastic foam technology developed by NASA during the 1970s to help cushion astronauts during liftoff. The company's TEMPUR and Tempur-Pedic brands – more... are sold in more than 80 countries through four distribution channels: retail (furniture and department stores), direct (online and company-owned stores), health care (hospitals and medical retailers), and third-party distributors. Tempur-Pedic announced in late 2012 that it is buying rival Sealy in a deal valued at $1.3 billion.

Mergers and Acquisitions

Together, Tempur-Pedic and Sealy would create a $2.7 billion bedding company and give their iconic brands more traction globally. The deal is expected to close during the first half of 2013.  


Tempur-Pedic operates through two primary segments: domestic and international. The company's domestic segment comprises its US manufacturing facilities in Virginia and New Mexico, which cater to Tempur-Pedic's US distribution unit and certain third-party distributors in the Americas. Its domestic business accounts for about 70% of sales. Tempur-Pedic's international segment, which generates the remainder of sales, boasts a manufacturing plant in Denmark that serves all of the company's distribution subsidiaries and third-party distributors outside North America. In 2010 Tempur-Pedic bought out its Canadian distributor and made it a wholly owned subsidiary as the mattress maker works to gain market share in the country. Tempur-Pedic has inked similar deals during the past few years in Austria, Australia, China, and New Zealand.

Financial Analysis

Tempur-Pedic posted record sales of $1.4 billion in 2011 as its business continued to rebound from the depths the recession and housing crisis. Indeed, between 2009 and 2011 sales climbed 70% and surpassed their pre-recession high of $1.1 billion. Net income has also increased sharply over the past two years, up 243% since 2009. In addition to the improved economy and pent up demand for a good night's sleep, the company credited investments in marketing, successful new product introductions, and its expanded distribution network for the strong growth in sales. Tempur-Pedic mattress sales, which typically spur the sale of its pillows and other products, increased more than 28% in 2011 vs. 2010. Most of its mattresses are sold in its retail stores. Sales growth in North America (up 30%) outpaced international sales (up 24%) in 2011.


Mattresses are the company's flagship product, representing two-thirds of Tempur-Pedic's total sales. The mattress maker isn't one to rest, though. The company regularly rolls out new models of mattresses, launches new products, or updates existing mattresses globally. In summer 2012 it debuted two new mattresses featuring its new TEMPUR-Breeze technology, designed to produce a cooling effect. On the retail front, the company in 2012 opened its first flagship retail store in Natick, Massachusetts near Boston. The 3,500-square-foot store carries the company's full product line. Given its relatively small share of the mattress market, Tempur-Pedic believes it has plenty of room to steal market share away from spring mattress makers. In recent years Tempur-Pedic has been mining the healthcare niche, selling its products to hospitals, nursing homes, and healthcare professionals. The firm also partners with healthcare products makers to integrate its TEMPUR material into their products. Still, the healthcare segment is a tiny part of the company's business, accounting for just about 2% of 2011 sales.  The company is also looking to increase its presence in furniture and bedding stores throughout North America and in international markets and increasing global awareness of its premium brand.


Investment firm FMR LLC is the company's largest shareholder with about 14% of the stock. – less

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