Verlo crafting its customized, small-town future

Written by David Perry on 2007-12-06

Fort Atkinson, Wis. In this corner of the Midwest, in a renovated building that harkens back to the glory days of America's dairy belt, Verlo Mattress Factory Stores is charting a course for the future based on the Old World values that have always defined the company.

That means a tradition of craftsmanship, a promise of quality and customer service, and a commitment to integrity  some of the characteristics that separate Verlo from its competitors, company officials say.

The company logo, a craftsman in a leather apron, says much about where the company came from back in 1958 and where it is headed.

"That word, 'craftsman,' is the hub of who we are and what we do," said Dave Young, CEO of VyMaC Corp., Verlo's parent company. "Craftsmen take their time. They don't rush your bed." And craftsmen is what the company calls the workers who build its mattresses.

The company's tag line is, "Verlo. Made just for you." People are built differently and have different comfort and support preferences, the company says, so the same mattress doesn't work for everyone.

Verlo's customers can custom-order their beds, and they are more than willing to give the craftsmen making them enough time to do the job right, Young said. Most of the beds Verlo sells are two-sided, a type of construction that has vanished from most major producers' lines.

Verlo doesn't call itself a factory-direct operation, although the company does fit into that broad classification. Company officials say Verlo is more about the craftsmen who create its products than some anonymous "factory" churning out mattresses that sit in warehouses.

All of the stores and their attached factories are owned by franchisees, not the corporation.

"We are expressing in our new marketing message that we are not a 'factory direct' but a 'craftsman direct' retailer that manufactures custom-made bedding based on your selection in the store  not off-the-shelf product," said Keith Mackey, Verlo's vice president. "By focusing on a custom-made identity, we express our niche better and hope to continue to drive up the average unit selling price with better-quality, higher-priced products and offerings."

Verlo also is revamping its product lines, adding a new coil-on-coil line, and will almost double its top price, going from $2,198 in queen to $3,999. In addition, the company will revitalize its specialty bedding lines and will test airbeds, a first for the company.

Those moves are designed to appeal to consumers interested in luxury and specialty bedding, Mackey said.

But Verlo won't lose its focus on its roots, the traditional innerspring models that remain the hallmark of the company. "Innerspring is definitely the way mattresses should be built," Young said. "Innersprings are a time-tested product."

Operating mainly in small towns far removed from the bedding giants that dominate major metro markets, Verlo has carved out a successful and profitable niche. There are about 65 Verlo stores, with the largest concentration in Wisconsin and Illinois. The retailer operates as far south as Florida and as far west as Colorado. The company has just ventured into Texas, its 10th state, for the first time with a store in Beaumont.

Many Verlo stores are attached to factories, where consumers can watch as their mattresses are made.

"These are craftsmen and they are known in their local communities," said John Siipola, Verlo's president. "They build the mattresses locally." He said that in their local areas, the stores have market shares ranging from 28% to 40%.

Referrals and repeat business are a critical component of the company's success, Siipola said. Verlo takes a bedding boutique approach.

"The mattress industry is a truckload-supply industry," Young said. "Smaller, faster sources of supply are needed. A 50-pound bag of Cheetos will go stale on the shelf."

Consumers who visit the Verlo store at the company's headquarters in Fort Atkinson can look through a large window in the showroom and see workers assembling their beds. The showroom and factory are on the first floor of the five-story Creamery Building, which dates back to the 1920s. The showroom opened in October 2006.

VyMaC Properties, a company also headed by Dave Young, renovated the historic building, and Young relocated Verlo's headquarters to the building's fifth floor. He also moved the offices of VyMaC Corp., which produces the sleep kits used by Verlo retailers and other bedding companies to assemble mattresses, to the fifth floor. The open spaces and natural lighting on that floor encourage face-to-face communication and problem-solving, Young said.

VyMaC retains its 60,000-square-foot manufacturing and distribution facility in nearby Whitewater, but Young says the facilities in scenic Fort Atkinson make the company's employees a more united team. The company's former offices in Whitewater were converted to a 5,000-square-foot research and development center, dedicated to sleep products design and customer product support.