One of the strongest forces influencing company location choice can be that most elemental force of all: gravity.
Take sand, for example. Most construction projects looking for it don't look beyond 60 miles away from the project site because hauling the heavy sand farther than that begins to erode profit.
Then there's the sandman — and we're not talking about heavy eyelids. As anyone who's ever moved can attest, one of the most cumbersome things to transport is a mattress.
"We try to be within about 300 miles of the longest distribution point because of the weight and size of the mattress and how quickly we try to respond to customer orders," says Paul Dascoli, CFO of Serta Simmons Bedding (SSB), which operates 39 plants and employs 6,000 people across North America. "We try to get an order out between 48 and 72 hours after we receive it."
The specific gravity of a company headquarters is another thing altogether. Dascoli and the SSB team recently weighed all the factors and decided to move their HQ the 723 miles from Hoffman Estates in suburban Chicago to the northeast Atlanta city of Doraville. (Site Selection documented the construction of the company's architecturally unique new Illinois home in May 2006.)
The new home for the largest US manufacturer and distributor of mattresses will consolidate the Illinois HQ and three locations in Atlanta into one site at the Assembly site in Doraville, a 165-acre urban renewal site that formerly was the home of a General Motors plant that closed in 2008. The campus will house 500 employees for SSB and its Serta and Beautyrest brands starting in early 2019.
Assembly is located near the intersection of Interstates 285 and 85 and adjacent to the Doraville MARTA (Metropolitan Atlanta Rapid Transit Authority) station, the northernmost stop on the system's Gold Line, which counts Hartsfield-Jackson International Airport as its other terminus. Among the development's components is The Yards, an area devoted to the creative class that currently is anchored by film and TV production company Third Rail Studios.
“Co-locating SSB’s headquarters and our brands on the same campus is an investment in our employees and our company as we continue to expand and strengthen our market leadership,” said SSB CEO Michael Traub in June. “An integrated and unified work environment that will foster better collaboration, innovation and teamwork, will better support our growth trajectory."
The approximately 210,000-sq.-ft. facility, built and designed specifically for SSB, will span five acres and feature an Innovation Center and multi-brand showrooms. Serta and Beautyrest will each have their own separate and distinct spaces on the new campus to maintain brand differentiation.
Holder Properties is the selected developer for the new headquarters and Rule Joy Trammell + Rubio are the lead base building architects. Hendrick and Associates will design the headquarters’ interior and JLL serves as the real estate advisor for SSB. Integral is the master developer of Assembly. In late July, Holder and SunTrust Commercial Real Estate closed the financing on a $42.7-million construction loan for the complex, as well as a 550-space parking deck.
“We’re thrilled to be working with Serta Simmons and JLL to develop this corporate headquarters campus,” said John Holder, chairman and CEO of Holder Properties. “SunTrust has been a trusted financing partner for Holder Properties for many years. Their commitment to this groundbreaking project at Assembly confirmed our belief in Integral’s vision for Assembly."
'Least Disruptive' Option
Simmons made its first mattress in 1876 ... or as the company likes to say, over 50,000 nights ago. After starting to produce woven-wire mattresses in 1876, by 1891 it was the largest company of its kind in the world. Beautyrest, first developed in 1925, remains Simmons’ signature mattress brand to this day. Serta and Simmons first joined forces in 2010 as sister companies, and formally realigned to a "two brands, one company, one mission" business model in 2016.
CFO Dascoli joined the company two years ago, coming from Columbus, Ohio, where he worked for Express. "I've worked for a lot of great companies that had brands that were No. 1 or No. 2 in their space," he says in an interview, among them Pepsico and VF Corp. SSB is no different, with close to a 40-percent market share.
The company for about 18 months had a small team assessing the need to have one consolidated HQ facility. Working out of the three Atlanta offices and HQ in Illinois was "very inefficient for us," Dascoli says. After considering various locations that might make sense for SSB, he says, "We came to a conclusion early on that Atlanta would be the place to build a corporate headquarters. It's a great place for associates to live, and a very business-friendly community.
"We were primarily trying to decide between Atlanta and Chicago," he says. "Chicago has been very good to us, with the facility in Hoffman Estates, but Atlanta was going to be the least disruptive — about 380 of the 500 people we expect to occupy this building are already in Atlanta."
The company offered every single Hoffman Estates employee the opportunity to relocate to Atlanta, with trips scheduled to introduce the area. "We would be thrilled if 100 percent chose to join us," says Dascoli.
"Once we made that decision and knew we wanted a corporate campus that included not just an office building but also an R&D center with light manufacturing, opportunities for space became somewhat limited," he says of narrowing down properties in Greater Atlanta, "and the Assembly project in Doraville became pretty obvious to us. What they're doing there, and particularly at The Yards, was very, very attractive to us. From a location standpoint, it's the least amount of disruption for our employees, and allows employees who travel on MARTA to have ready access. It's almost a natural for us. We're really excited to be part of it, and to be one of the first to move into that area."
The new campus will feature two distinct physical spaces for the Serta and Beautyrest brands' marketing teams, as well as two separate showroom areas. Asked about the rationale behind the separation, Dascoli says, "It's important to keep a distinction because of what they stand for and how they go to market in the retail space. Each brand has a very long heritage of products in the marketplace — over 150 years of history. We have two of the leading brands in the industry, reliable for the consumer and the retailer. We want to keep that brand distinction to continue to go to the market in different ways and really meet the needs of the consumer."
Dascoli's responsibilities extend to the manufacturing footprint too. While separate and distinct may be the operative phrase for the two brands at the new HQ, the company is always looking for ways to improve its manufacturing and, where possible, blend production.
"Most of the manufacturing facilities are brand-specific, and we're looking at ways we can produce both brands in a facility to be more brand-agnostic," he says. New manufacturing locations in Windsor Locks, Connecticut; Seattle; Houston; and Moreno Valley, California, will help. They're part of a $100-million-plus manufacturing and advertising pledge the company made early this year. The company held the grand opening for its new Houston facility last week. The 100-employee plant is four times the size of the company's previous plant there, and will kick out more than 1,000 mattresses a day.
"At some of the new facilities, we expect to be able to produce both brands. It comes down to the componentry in the product. Our IComfort line on the Serta line is an all-foam product. Until recently we did not have that type of product in the Simmons factory." But some of the recently introduced Mattress Firm all-foam product now is being produced in Simmons facilities. (Houston-based Mattress Firm and SSB signed a five-year strategic partnership agreement early this year, with SSB pledging to manufacture to Mattress Firm's requirements.)
"One of the things we've tried to do in the last year or so is reduce the level of raw material SKUs by introducing common SKUs while not giving up the brand distinctness," Dascoli explains. Size standards are another area for scrutiny.
"Let's say a queen size standard is between 60 and 61 inches," says Dascoli. "The Serta brand might have been 60 inches and our Simmons might have been 60-and-three-quarter inches. It's still within tolerance, but when you don't have a standard size, it makes things difficult. I equate it to the auto industry — in Lexus or a Camry, the cruise control button is exactly the same. We're trying to do some of that same thing in the bedding industry, to improve our manufacturing process."
A City That Dares to Dream
SSB's primary partner as it's moved forward on the project has been the City of Doraville, which might be said to be following SSB's mission statement: "Dare to Dream Differently."
Reached by email, Doraville Mayor Donna Pittman says the combination of R&D and headquarters at the site "is very exciting and brings synergy to the site." She says the overall Assembly redevelopment is a multi-phase work-in-progress. One of its purported benefits championed by Integral was better assets for the community, such as an auditorium so its high school could hold graduations. Asked about progress on such amenities, Pittman says the exciting things going on in Doraville include "a new elementary school, Metro City Bank, the Nexus Project [old Kmart site], the IMPROVE Showroom [old Georgia Pacific building] bringing a minimum of 500 new jobs, the Carver Homes residential project and The Lofts on the Assembly site — just to name a few."
As for spinoff from the film and TV production activity at Third Rail, she says the studio "has brought a flurry of other production companies to the city as well as supporting local businesses that provide services." (Read Savannah King's account of film industry growth in Georgia and the Southeast from the September issue of Site Selection.)
Could Assembly be among candidates for the Amazon HQ2 project everyone in North America is chasing? Mayor Pittman politely demurs and says the state is taking the lead on that project. But the prospect of further expansion of MARTA rail beyond the terminus in Doraville might be more realistic and, ultimately more promising. Asked about that possibility, she says Doraville not being the terminus would mean "we would no longer be the end of the line, but become a destination, and it would help to implement our vision for a downtown Doraville."
The new headquarters, in the meantime, will improve SSB associates' daily outlook.
"We really like the vision Integral has for the overall space," Dascoli says, noting the favorable mix and the overall vision for green space, restaurants and recreation. "There's an interesting mix of corporations, other businesses, retail and apartments. Being in there early on will be really exciting for our associates to see it all come to life."