Simmons Bed Surpasses 200 Billion KRW in Sales Last Year

[Asia Economy Reporter Moon Hyewon] Simmons Bed announced on the 13th that it has surpassed annual sales of 200 billion KRW for the first time since its establishment.

Last year, Simmons Bed's sales amounted to 203.8 billion KRW, showing a slight growth of 3% compared to the previous year. Operating profit was 10.6 billion KRW, recording an operating profit margin of 5%. Simmons Bed analyzed that the increase in labor costs due to various investments and large-scale hiring of new personnel following the introduction of a new distribution system, the consignment agency, affected the sales growth.

Last year, the number of consignment agency stores increased to a total of 19, resulting in a 43% (1.5 billion KRW) increase in rent compared to the previous year. The number of users of Simmons Pay, a 36-month long-term interest-free installment card system, increased, leading to higher credit card fees. Additionally, as consignment sales including department stores increased, commission fees also rose by 9.9 billion KRW, causing a burden on the cost side.

Also, influenced by the implementation of the 52-hour workweek system and the rise in minimum wage, more than 130 new employees were hired. At the beginning of last year, a special performance bonus equivalent to 200% of the monthly salary was paid to all employees, resulting in a 32% (7.9 billion KRW) increase in labor costs. Simmons Bed was recognized for these efforts and was selected as a ‘2019 Youth-Friendly Small Giant Company’ by the Ministry of Employment and Labor.

Advertising expenses decreased by 21% (5.9 billion KRW) by maximizing operational efficiency through the reestablishment of the advertising platform and clear customer targeting.

Lee Jeongho, Vice President and Chief Financial Officer (CFO) of Simmons Bed, said, “Last year, due to various investment costs, the operating profit margin was in the single digits, and sales only showed slight growth. From this year, we expect significant results through the stabilization of the revamped system. The fact that sales in the fourth quarter of last year already exceeded 60 billion KRW is proof of that.”

This content was produced with the assistance of AI translation services.