Sometimes an idea for a business opportunity comes along at just the right time.
That? what happened about 15 years ago to childhood friends Lisa Bernath and Margalit Grunberger. Bernath, a textile designer, and Grunberger, a marketing and public relations executive, were looking to start their own business together, but were having trouble coming up with a workable idea.
Then Bernath got a crick in her neck and went out looking for one of those expensive memory foam pillows that were becoming all the craze at the time. But the $100 Tempur-Pedic pillow she bought was square, not rectangular. When she brought it home, she found that the standard-sized pillowcase was too long and had to be folded for best effect.
So she designed and sewed her own pillowcase.
?t that moment, a light went on and I realized that thousands of other people like me had just bought these odd-sized pillows and were making do with pillowcases that didn? fit and looked horrible,?Bernath said. ?hat? when I got the idea that this was the business opportunity we were looking for.?
So, in 1996, Bernath and Grunberger launched Gotcha Covered, which initially specialized in making bed coverings for unusually sized pillows and mattresses and targeted the stores, where those products are sold. The company is now in Burbank.
Currently, Bernath, 55, and Grunberger, 50, are trying to ride out the recession, which has decreased sales of home furnishings. They have started selling to hotels and are trying to break into the hospital market. They also have launched a ?reen?product line to capitalize on the trend sweeping through the industry.
So far, Gotcha Covered is managing to hold its own, with 2008 sales between $3 million and $4 million. While its traditional market of mattress stores and odd-sized bed coverings has slumped, that decrease has been offset by gains in sales to hotels.
?iding a wave?/b>
In the early days they had one key advantage: specialty mattresses and pillow makers such as Tempur-Pedic had no interest in making coverings for their products and were more than happy to let Gotcha Covered fill that niche.
Within a year, Bernath and Grunberger were selling their $12 pillowcases at Relax the Back and other specialty retailers.
?e had really hit on something,?Bernath said. ?eople were snatching up these pillowcases much faster than we could make them.?p>Bernath, who had recently gone through a divorce, was living with her parents at the time. The living room became a storage room for the sheets and pillowcases, while Bernath and Grunberger used the dining room table to package the pillowcases for shipping to stores.
After a few months, Bernath quit her job and turned her attention full time to the company. As Tempur-Pedic pillows and mattresses gained in popularity and that company started adding new sizes, Gotcha Covered expanded its size offerings and started making sheets and mattress covers.
?e grew right along with Tempur-Pedic,?Grunberger said. ?t was like riding a wave.?p>They had started financing the business with credit card balance transfers, but soon it was time to get serious. So Grunberger quit her day job in marketing and public relations and got a line of credit. Bernath, meanwhile, was convincing salespeople at the various specialty mattress stores they dealt with to stock their merchandise.
Gotcha Covered benefited from changes in the mattress industry. New types and sizes of so-called ?omfort?models were being introduced more frequently than in the past, and people needed made-to-fit covers and sheets for them. Most bed and pillow coverings were sold separately from mattresses in department stores or specialty linen outlets; often people buying them would take them home and realize they didn? fit well. So the mattress stores started ordering Gotcha Covered sheets they could sell to their customers.
?ll the new comfort mattresses that had started coming out were thicker than conventional mattresses, so you needed sheets that fit,?said Nelson Berseier, co-owner of Sit ? Sleep, a Gardena mattress retailer and a longtime customer of Gotcha Covered. ?y selling Gotcha Covered bed coverings in our stores, we could guarantee our customers that when the mattress was all set up in the home, the sheets would fit.?p>One reason the mattresses became so thick: Manufacturers put foam or ?emory gel?into them, according to Dale Read, editor of Bedroom Magazine, a national trade publication.
Over time, Gotcha Covered branched out from making just odd-sized coverings for unusually shaped pillows or thick mattresses to making bed coverings of all sizes.
Since then, Gotcha Covered has moved into another hot consumer trend: so-called ?reen?bed coverings. Sensing that environmentally conscious consumers were willing to pay more for products certified as organic, the company created a line of pillowcases and sheets made from organically produced cotton or wool. Their suppliers do the certification.
Gotcha Covered is now dealing with the impacts of the recession.
?o question we?e seeing fewer orders today from mattress sellers and related retailers,?Bernath said.
To cope, over the last 18 months Gotcha Covered has started marketing to hotels.
?or the longest time, most hotels ?except for the high-end luxury hotels ?didn? really care too much about what kind of sheets were on their beds, as long as they were durable,?Bernath said. ?ow, all hotels are putting a premium on service, and having good quality sheets has become a priority.?p>The hospitality sector now accounts for about one-fourth of Gotcha Covered? annual sales, and both Bernath and Grunberger said they want to see that percentage continue to grow. A major focus of their outside sales force is instructing hotel staff on how to care for their sheets, which require special washing techniques due to their special cotton.
In the longer run, Bernath and Grunberger said they envision selling Gotcha Covered to an industry player.
But, they hasten to add, ?ot for a long while. We?e still got plenty of things we want to accomplish in this business.?p>
CO-OWNERS: Lisa Bernath, Margalit Grunberger
CORE BUSINESS: Makes bed coverings to sell to mattress store chains, bedroom furnishing stores and hospitality industry, with specialty in odd-sized bed coverings; also makes pillowcases
EMPLOYEES IN 2009: Five (not including outside sales force), same as 2008
GOALS: Increase sales to hospitality industry; add lines of coverings for sofa beds and hospital beds; increase sales of certified organic bed coverings; sell company to larger industry player
DRIVING FORCE: Retailers need bed coverings to sell with mattresses and sofa beds; consumers need bed coverings to fit odd-sized mattresses and beds
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