San Francisco’s Oldest Family-Owned Manufacturer Shifts to Retail-Only

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McRoskey Mattress, which had been the oldest family-owned manufacturer in San Francisco, closed its Minnesota Street plant last fall after selling its production and brand rights to Fresno-based Pleasant Mattress. The shift marks a new chapter for the iconic company, which now focuses solely on retail sales.

McRoskey was established in 1899 by brothers Edward and Leonard McRoskey.  The companyis currently run by Edward’s granddaughter, Robin Azevado. The 77-year old Azevado now serves as brand ambassador for Pleasant while overseeing McRoskey’s San Francisco, Palo Alto and San Rafael retail showrooms.

Azevado said she’s pleased with the association because Pleasant, which began making mattresses in 1959, is also a third-generation family-owned firm.

“They are not quite as old as we are, but regardless have the same business ethics we do,” she said.“They’ve already got a good distribution system because they make mattresses for other companies, so they have that infrastructure in place on how to reach retailers, where to place products and have them sold. That’s an expertise we don’t have and I think it’s good for the brand to step into that kind of exposure. They can take it to farther away places than we can. Outside California, nationally and internationally.”

By acquiring McRoskey Pleasant added a luxury brand to its portfolio. The company manufactures several brands, including Spring Air and MAXX, but nothing as pricy as McRoskey, which can draw $4,000 to $7,000 for a queen-sized set. 

McRoskey has long touted its design and handmade craftsmanship. Pleasant will continue to build products according to the same specifications. Pleasant, which also purchased marketing and distribution rights to the brand, is retrofitting a 25,000-square foot building on its 150,000-square foot campus, and anticipates hiring eight to 10 employees.

McRoskey laid off 13 factory personnel as a result of the deal, leaving it with a dozen employees at its three stores. According to Azevado, sales staff can still provide factory-direct service, with clients able to place custom orders with Pleasant.

Azevado is confident that McRoskey can succeed as a retail-only operation. While the brick and mortar trade is becoming riskier in the face of Amazon and other online outlets, mattress stores have proliferated over the past six years. There are now 9,000 such stores in the United States, more than Starbucks’ 8,200 standalone coffee shops. Caspar, an online mattress store startup, plans to open 200 land-based stores over the next three years, citing a need to provide shoppers with the opportunity to touch and feel products.

The largest chain, Mattress Firm, filed for bankruptcy last year after it jumped from 700 to 3,300 stores in just five years; growth so rapid the company had to tweet a denial to an unsubstantiated Internet rumor that it was a front for money laundering.

The mattress industry got a post-recession bounce beginning in 2013. New home buying had been down; mattresses are generally believed to be an item people put off purchasing when disposable income is tight.

Fluffy mattress profits encourage companies to provide potential customers opportunities to sleep around.  According to Consumer Reports, there’s a 100 percent markup on most mattresses, with substantially greater margins on mattresses priced at more than $1,000. Conventional wisdom has it that people prefer to buy a mattress in person, as they are likely to lie on it for a decade. A survey by Furniture Today revealed that 20 percent of consumers would never buy a mattress online and, as of 2016, only six percent of mattresses were cyber-purchased. According to SleepZoo, an online site dedicated to slumber issues, overhead is low at mattress stores; a single location may only have to sell a couple dozen a month to cover costs.

The practice of customers trying a product in a store and then buying from a cheaper online retailer hasn’t become common in the industry. This may be partially due to stores commissioning unique models from manufacturers that aren’t sold online, making comparisons confusing for shoppers. McRoskey, while cyber-selling, doesn’t peddle through mass discount sites like Amazon.

“There is some convenience to our customers to buy online, but there is great confidence when someone comes into a brick and mortar for an important purchase like a good mattress,” said Azevado, explaining that a retail team can listen to what a customer needs and provide guidance on what they offer. “We are not pushing a warehouse full of mattresses. We’re helping them make the right choice.”

McRoskey has paper-and-ink ledgers dating back to when its showroom at 1687 Market Street opened in 1925. Azevado said if someone wants an adjustment on what they previously owned, or desires what a friend or relative has, the company can reference back several generations.

Anchor Brewing is San Francisco’s oldest manufacturer. Anchor began operating under its name in 1896, though the company was dormant during Prohibition.

McRoskey’s had leased its 20,000-square foot plant at 1400 Minnesota Street, which is currently listed for rent.