Dive Brief:
- About nine years after entering the country, mattress brand Casper Sleep Inc. has agreed to sell its Canadian operations to Sleep Country for $20.6 million, according to a Monday press release.
- Canadian retailer Sleep Country will receive a $4.5 million marketing transition fee from Casper over the next three years and get three-year warrants that could convert into a roughly 1% stake in Casper once exercised, per the release. Sleep Country also invested $20 million in five-year convertible notes that could convert into about 5% of Casper’s shares.
- Sleep Country operates 290 corporate-owned stores and 20 warehouses across Canada.
Dive Insight:
Casper made its name as a disruptor to the mattress industry, but its latest move will benefit a traditional retailer.
"We are thrilled to expand upon our retail journey by partnering up with one of North America's top sleep retailers," Emilie Arel, CEO of Casper, said in a statement. "Sleep Country has been a retail mattress legacy for almost 3 decades, and sharing best practices with this leading retailer only helps accelerate our expertise and rapid growth in the retail omnichannel space.”
U.S.-based Casper entered Canada in November 2014 as the brand’s first expansion internationally through its e-commerce website. The company has expanded its physical presence in the country, opening its company headquarters and investing in a multi-province retail footprint in 2018. Casper has six physical stores in Canada, according to a spokesperson for Sleep Country.
Casper initially launched as a direct-to-consumer brand in 2014, but has since expanded its wholesale presence with partners such as Mattress Warehouse, Nordstrom and Bed Bath & Beyond.
The mattress brand went public in February 2020, but less than two years later announced it would go private again after being acquired by private equity firm Durational Capital Management. At the same time, co-founder Philip Krim announced he would step down from the CEO position. Arel, who was Casper’s president and chief commercial officer at the time, succeeded him.
Under Arel’s leadership, Casper has changed its approach to growth.
“We’re not in the business of not making money anymore,” Arel said at eTail’s Boston conference in August. “VC money is not falling from the ceiling anymore, we need to be very specific on what we’re working on. And so moving from being a lifestyle brand — being sort of the Nike of sleep, selling to everybody — to: ‘We are a mattress retailer.’”
