Sleep Country Canada Opens Two New Super Hubs, Driving Operational Efficiencies and Unlocking Next Chapter of Growth Story

New hubs increase Sleep Country's warehouse storage capacity by 65%, enhancing today's customer experience and fuelling the Company's future exciting roadmap

TORONTO, June 28, 2021 /CNW/ - Sleep Country Canada Holdings Inc. ("Sleep Country" or "Sleep Country Canada" or the "Company") (TSX: ZZZ), Canada's leading omnichannel speciality sleep retailer, today announced an expansion of its fulfillment network with two new storage hubs located in Calgary, Alberta and Belleville, Ontario. Building off the Company's record-breaking success, this strategic infrastructure investment increases operational efficiencies, improves the opportunity for margin expansion and supports future years of planned aggressive growth.

The two newly designed storage hubs add 278,000 square feet (12 million cubic feet) to the Company's existing network of 17 strategically located fulfillment centres and increase overall warehouse capacity by 65%, supporting Sleep Country's vision to drive operational and delivery efficiencies.

Featuring advanced technology, these storage hubs will provide Sleep Country with efficiencies in fulfillment and distribution to support its growing direct import program for accessories and bed in a box, with expanded margins. They will also ensure flexibility in receiving, picking and packing inventory to service its expanding online business and establish the infrastructure required to fuel Sleep Country's aggressive future growth plans. The new storage hubs will reduce the Company's need to expand its existing fulfillment centre square footage in premium priced markets, clearly distinguishing and focusing on its competitive advantage to enhance its last mile just-in-time fulfillment centres from its storage facilities for inventory.

Canadian customers shopping online and in-store will benefit from these new storage hubs through improved stock availability, expanded assortment and faster fulfillment options. Both storage hubs are planned to be fully operational this summer with the Calgary hub opening in July, followed by Belleville in August.

"Today's announcement will further advance the exceptional value that Sleep Country's overall supply chain logistics brings to our business and our customers. Not only have we built a coast-to-coast network of 287 conveniently located stores and become one of the fastest growing online bedding retailers to further enhance our customer experience, but over the years we have also constructed an unmatched network of delivery and distribution to service our customers for that increasingly important last mile delivery with speed, flexibility and efficiency. These new storage hubs further support our promise to deliver world-class customer experiences at each and every touchpoint," said Stewart Schaefer, President, Sleep Country and Dormez-vous.

"Last year, we took advantage of market opportunities to secure competitive pricing for these facilities that will support our aggressive growth plans for years to come. Our record-breaking results and the overwhelmingly positive response from Canadians over the past year made this the perfect time to take the next step in our strategic growth roadmap," continued Schaefer.  "After 27 years in business, we know that investing in a powerful physical infrastructure is an important strategic element of our competitive advantage and an essential catalyst to support our growth. With these new storage hubs, we are well-positioned to execute growth opportunities including establishing new vendor partnerships, category and product innovation, improving our direct overseas sourcing capabilities and online marketplace expansion."

Sleep Country has driven improved product gross margins and profitability over the last several years because of its strategic shift from a solely just-in-time local fulfillment model to a combination of local partners and direct import fulfillment model. This approach was purposefully implemented to support   powerful growth in the Company's eCommerce, sleep accessories and Bloom bed-in-a-box businesses with expanded margins.

These storage hubs, strategically located in proximity to the country's largest ports on the east and west coasts, will further enhance our direct import capability by receiving and housing a growing number of imported containers and serving as a more efficient breakpoint to deliver product quickly and effectively to the Company's fulfillment centre network.

This new strategy will further advance the efficiencies and the delivery capacity of our 17 existing fulfillment centres, which will continue to be the sole provider of the Company's leading white glove last mile delivery service that Canadians have grown accustomed to coast-to-coast — an important commitment and service differentiator for Sleep Country.

About Sleep Country 

Sleep Country is Canada's leading omnichannel specialty sleep retailer with a national retail store network and robust eCommerce platforms. The Company operates under three retail banners: "Sleep Country Canada", with omnichannel operations in Canada excluding Québec; "Dormez-vous?" with omnichannel operations in Québec and "Endy", Canada's leading direct-to-consumer online sleep solutions retailer. As of June 18, 2021, Sleep Country has 287 stores and 17 fulfillment centres across Canada. Sleep Country is a purpose-led company dedicated to transforming lives by awakening Canadians to the power of sleep. The company is committed to meaningfully and positively supporting its environment, people and communities including operating a comprehensive Mattress Recycling Program and working closely with Canadian charities to donate new and gently used mattresses to families and children in need.

SOURCE Sleep Country Canada Holdings Inc. Investor Relations

Craig de Pratto, Chief Financial Officer, Sleep Country Canada, [email protected]