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Sleep Country Canada: Waking Up to E-Commerce

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Sleep Country Canada: Waking Up to E-Commerce

Sleep Country Canada (ZZZ) is Canada’s leading omnichannel specialty retailer that sells products through brick-and-mortar and e-commerce channels.

The company operates under three banners: Sleep Country Canada (pmnichannel operations all over Canada), Dormez-vous (omnichannel operations in Quebec), and Endy (Canada’s leading online mattress-in-a-box retailer).

As of December 2020, Sleep Country had 281 stores and 17 distribution centes across Canada. The stores have Canada’s largest selection of mattresses (including bases and metal frames), and accessories such as pillows, pillowcases, sheets, and blankets.

In 2020, 79.3% of revenues were from mattresses, with the remaining 20.7% from accessories. Sleep Country has demonstrated the ability to undergo market share expansion pre-pandemic.

From 2015-18, mattress market share expanded consistently every year at a 12% compound annual growth rate (CAGR) from 22% to 31% in 2018.

Furthermore, Sleep Country has a market share of 5%-8% in the accessories market. I am bullish on the stock. (See Insiders’ Hot Stocks on TipRanks)

Attractive Industry Fundamentals

The mattress industry in Canada is a $1.8-billion market that is growing across the nation. In the industry, the demand is driven by replacement cycles of 8-10 years.

During economic downturns, these sales are typically delayed but not lost, creating pent up demand. Similarly, Sleep Country also operates in a large sleep accessories market, which is estimated to be worth $1.5 billion.

Growth of E-Commerce Platform

Sleep Country launched a new website in Q4 of 2019 to provide customers with a way to shop online which creates a full omnichannel experience.

This positioned the company well going into the pandemic, where it had to shift its entire business to e-commerce platforms for a period of time as stores were closed.

The strategy proved to be a very successful endeavor, as the company achieved its highest revenues in history with a high gross profit margin of 32.3% in 2020. In 2020, e-commerce sales represented 21.4% of total revenues.

Strong Brick-and-Mortar Track Record

The company has a strong track record with brick-and-mortar stores in Canada.

In the June 2019 management presentation, the company outlined that its new stores cost ~$400,000 of capital expenditures and working capital investment.

These stores are typically cash flow positive within 12 months of opening. From 2015-18, Sleep Country opened around 13 stores a year on average, with 12 stores in 2019, and six stores in 2020 due to the pandemic.

In 2021, the company has outlined that it continues to believe in the brick-and-mortar store format, and will open a minimum of six new stores in 2021.

In addition to opening new stores, the company has also outlined a plan to renovate existing stores to the “enhanced store design” which has higher same-store sales (SSS) growth, relative to its legacy stores.

As of December 2020, 78% of its stores had been renovated, and it plans to renovate another 20-30 stores in 2021.

Strong Retail Partnerships

Sleep Country has demonstrated the ability to develop strong exclusive retail partnerships with mattress manufacturers and other retailers to sell its products.

The company currently has a partnership with Simba, a leading mattress-in-a-box retailers in the U.K. to sell mattresses in Canada. In 2020, It entered into a partnership with Purple Innovation, a U.S. mattress and bedding company, and Malouf, another U.S. company that had bedding and furniture products.

In September of 2021, Sleep Country signed an exclusive retail and digital partnership with Casper, to make the brand more accessible to Canadians.

On the retail front, Sleep Country recently expanded its relationship with Walmart Canada (WMT) with the launch of 10 new locations in Walmart Canada’s licensee spaces.

Earlier this year, Sleep Country announced a partnership with Best Buy Marketplace (BBY), to exclusively supply traditional mattresses on the platform.

Management Change

On July 2021, Sleep Country appointed Stewart Schaefer as president and CEO of the company, after Dave Friesema announced his retirement in 2021. Mr. Schaefer has been a part of the executive leadership team since 2006.

Mr. Schaefer founded Dormez-vous in 1994, and joined forces with Sleep Country in 2006. He has extensive industry experience, both as a founder, and as a strategic operator of a company with an omnichannel focus.

This leadership transition should be a positive move for the company, as it continues to grow its omnichannel strategy.

What Analysts are Saying about ZZZ Stock

From Wall Street analysts, ZZZ earns a Moderate Buy consensus rating, based on three Buy ratings and two Hold ratings. Additionally, the average ZZZ price target of C$40 puts the upside potential at 9.2%.

Bottom Line

With a leadership position in the Canadian market, the continued success of the brick-and-mortar strategy post-renovation, and the re-opening of existing stores, the legacy business is well-positioned for success.

In addition, the transition to an omni-channel strategy will provide further growth opportunities for the company.

This in-turn helps Sleep Country continue to develop strong retail partnerships across Canada, to both maintain and grow its leadership position, as it has over the last few years.

Disclosure: The author works as a manager at National Bank Financial and had no position in any of the companies discussed in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk.

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LIFESTYLE

Choosing the Perfect Costume Wig with A Guide to Natural Hair Wigs

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Choosing the Perfect Costume Wig with A Guide to Natural Hair Wigs

When it comes to creating the perfect costume or theatrical look, a wig can play a transformative role. Whether you’re dressing up for a special event, a theatrical performance, or simply for fun, choosing the right wig is crucial. In Australia, the popularity of natural hair wigs has been on the rise, offering a realistic and versatile option for those seeking authenticity in their appearance.

Understanding Your Needs

Before diving into the world of wig shopping, it’s essential to understand your specific needs. Consider the character or style you’re aiming to portray. Are you going for a historical figure, a fantasy character, or a modern celebrity look? Knowing the details of your desired style will guide you in choosing the right type of natural hair wig.

Material Matters

Wigs come in various materials, each offering unique benefits. Natural hair wigs, often made from human hair, are prised for their realistic appearance and versatility. In Australia, where the climate can vary, natural hair wigs are preferred for their breathability and comfort. Synthetic wigs, while more affordable, may lack the natural look and feel that human hair wigs provide.

Consider Your Budget

While natural hair wigs are known for their authenticity, they often come with a higher price tag. Before embarking on your wig-shopping journey, set a budget that aligns with your financial comfort. Keep in mind that investing in a quality natural hair wig can pay off in the long run, as they tend to be more durable and offer a more authentic look.

Choose the Right Style and Color

Selecting the perfect style and color is crucial to achieving the desired look. Natural hair wigs in Australia come in a variety of styles, from straight to curly, short to long. Consider the character or look you’re going for, as well as your personal style preferences. Additionally, pay attention to the color – whether you’re matching your natural hair or trying something bold, finding the right shade is key to a convincing appearance.

Focus on Fit and Comfort

Wearing a wig for an extended period can become uncomfortable if the fit is not right. Natural hair wigs are often adjustable, allowing for a customised fit. Look for wigs with adjustable straps or elastic bands to ensure a snug and comfortable fit. Prioritise comfort, especially if you plan to wear the wig for an extended period during events or performances.

Research Reputable Suppliers

When it comes to purchasing natural hair wigs in Australia, it’s crucial to buy from reputable suppliers. Research online reviews, seek recommendations from friends or fellow performers, and ensure the supplier has a history of providing quality wigs. Reputable suppliers often offer a range of styles, colors, and price points, allowing you to find the perfect wig within your budget.

Care and Maintenance

Once you’ve chosen the perfect natural hair wig, proper care is essential to ensure its longevity. Invest in wig care products and follow the recommended care instructions provided by the supplier. Natural hair wigs can be styled and treated similarly to your own hair, but they require gentle care to maintain their quality.

Conclusion:

Choosing the perfect costume wigs , especially natural hair wigs in Australia, involves careful consideration of your needs, budget, and style preferences. Embrace the transformative power of a high-quality wig, allowing you to embody your chosen character or style with confidence. By understanding the materials, fit, and care requirements, you’ll be well on your way to selecting the perfect natural hair wig for your next adventure in the world of costumes and theatrical performances.

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LIFESTYLE

Sleep comfortably in pyjamas

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Sleep comfortably in pyjamas

Pyjamas are often more comfortable for sleeping than other sleepwear.

Womens pyjama sets are more comfortable than sleeping in a T-shirt or shorts. This is because they have sleeves and legs, which provide warmth and protection from the cold air outside. They also help keep you warm when you’re as little as wearing them around your house at night before bedtime!

Why should you wear pyjamas at home?

Here is a list of reasons why you should consider purchasing pyjamas:

Pyjamas are an excellent option for sleepwear.

Women’s pyjama sets are a good choice for sleepwear. They’re comfortable, easy to wear and they look good too.

Pyjamas are an excellent way to prepare for bed in the morning, whether you’re going on vacation or want something that feels more relaxed than pyjamas. And if you’re planning on lounging around the house all day long, pyjamas can be dressed up with any number of accessories—like tights, socks, and shoes—to create an outfit that works well with whatever else is going on in your closet at home (and maybe even outside).

Some people say that the colours of your pyjamas can change your mood.

Some people say that the colours of your pyjamas can change your mood. For example, if you are in a bad mood and wear dark blue or black pyjamas, they will generate negative energy and worsen your mood. This is because these colours are associated with sadness, depression, and loneliness; therefore, wearing them will increase your body’s stress, which may cause headaches or insomnia.

However, other people claim that wearing bright-coloured clothing makes them feel happier than others who wear duller colours such as grey or navy blue because these colours seem more promising than darker shades which can give off an impression of being more relaxed than their surroundings (i.e., it’s easier to see through).

Some women find it empowering to feel confident in wearing pyjamas as sleepwear.

They feel more relaxed, comfortable, and at ease with their skin when wearing them.

Pyjamas are essential to a woman’s wardrobe; they can be worn during any year’s season. They can be used as bedwear or loungewear, depending on how you want to use them and where you choose to store them when not in use.

Pyjamas are a convenient and comfortable choice as sleepwear.

Pyjamas are a good choice for sleepwear. They’re comfortable and practical, easy to take care of, easy to wear and clean—and they can be worn with anything from t-shirts to blouses.

Pyjamas had come a long way since they were only for pyjama parties or slumber parties (a concept that may still exist). Nowadays, you can get any pyjamas in almost any colour combination imaginable.

Keep in mind a few things:

Using silk pyjamas around electrical devices, like a computer or TV, is not recommended.

Silk is a very soft material, so using silk pyjamas around electrical devices is not recommended. This is because silk can be damaged by electrical appliances and could cause them to short out or malfunction.

If you use your silk pyjamas with a computer, it’s best not to do so while they are on your bed, as there may be static electricity in the air that can damage your computer.

Pyjamas help insomniacs.

Pyjamas are a great way to relax. They’re warm and comfortable, which helps insomniacs get a good night’s sleep. If you have trouble sleeping at night, try wearing pyjamas every night before going to bed. This will help you fall asleep faster and sleep better throughout the night.

Pyjamas are also perfect for staying warm in bed while relaxing or sleeping soundly during winter when temperatures drop below freezing outside (or if your room is under construction).

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LIFESTYLE

Luxury sector impatient for return of Chinese tourists

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Luxury sector impatient for return of Chinese tourists

The European luxury sector is welcoming the end of pandemic lockdowns in China, as the return of big-spending Chinese tourists could sustain further growth.

Prior to the pandemic, Chinese tourists visiting Europe were a major source of sales for luxury houses.

The Chinese accounted for “a third of luxury purchases in the world and two-thirds of those purchases were made outside China”, said Joelle de Montgolfier, head of the luxury division at management consulting firm Bain and Company.

Their return has led RBC bank to revise up its growth forecast for the sector this year to 11 percent, from seven percent previously.

“China reopening is one of the key ‘mega-themes’ for the luxury sector in 2023,” RBC Bank said in a recent note to clients.

After a drop in 2020, the luxury sector managed to surpass its pre-pandemic sales in 2021.

“The Chinese consumed, but only in China,” said Bain’s de Montgolfier. “In 2022, it was much more complicated with unexpected confinements in the country,” she added.

Nevertheless, that didn’t hold the sector back from making an estimated 22 percent jump to 353 billion euros (384 billion dollars), according to a November forecast by Bain and Company.

That growth was supported by the wave of post-lockdown US tourists visiting Europe armed with a strong dollar, as well as Korean and Southeast Asian tourists.

Another pleasant surprise was Europeans “who had been ignored for decades… and were more interested in luxury goods than expected”, said Erwan Rambourg, a luxury industry insider turned analyst and author of the book “Future Luxe: What’s Ahead for the Business of Luxury”.

‘More staff’

With the lifting of travel restrictions in China “there will be a considerable return of Chinese tourists but that will be more likely in the second quarter”, said Arnaud Cadart, a portfolio manager at asset manager Flornoy.

“The pandemic is still very active in China and it will affect lots of people.”

The Chinese tourists may be needed if the flow of US tourists slows. “European boutiques need this rebound in Chinese clientele to replace its American clientele which could buy locally,” said Cadart.

They also need to readapt to Chinese customers, who tend to travel in groups, and will join a large number of US tourists.

“There are already lines in front of the boutiques even without Chinese clients… they need more staff,” said de Montgolfier. Otherwise, they risk a “degradation of the experience” of shopping in a luxury boutique.

Another concern: the volume of merchandise that Chinese customers will want to buy is unclear. The sector likes to keep volumes low and does not discount to ensure exclusivity.(AFP)

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