Sleep on it: an Ecuadoran finds a novel way to sell mattresses, and builds on empire along the way

Latin Trade, May, 2006 by Maria Elena Verdezoto

Canadian actor Michael Myers, best known for his role as the swinging man of mystery in the Austin Powers films, came to Chicago one day. His apartment was empty, and he was also starving. He ordered Chinese food and a mattress over the phone. Believe it or not, the mattress arrived first, according to Ecuadoran Napoleon Barragan, owner and president of 1-800-Mattress.

Barragan is one of thousands of Ecuadorans who have left the country looking for a better life. In 1968, when he was 18 years old, he went to Colombia to try his luck but instead soon bet on the American dream. "When I arrived to New York, I looked for a job related to teaching, but the best I got was selling correspondence courses," Barragan says. "In 1973, I was a sales agent and then manager of a furniture store."

By 1976, he had saved up enough money to open his first mattress and used-furniture store in Queens. As for many retailers, location often determines success. With that in mind, Barragan rented his first store next to York College, a division of City University, and opened for business under the name College Furniture Discounters.

Business was good, but Barragan wanted more. He couldn't sleep at night, tossing and turning while thinking how to build a 24-hour business. In September 1976, while reading the New York Post, he saw an ad on the paper: Dial-A-Steak, a business that sold meat over the telephone.

Inspired, Barragan soon advertised a home-delivery mattress service in The Village Voice. To sweeten the deal, Barragan also offered to haul off the old mattress at no additional cost. That little extra attracted a lot of customers. The strategy was so successful that today, he says, his company helps 3% of Americans get a good night's rest. Barragan firmly believes that good sleep is key to good family life. "After all," he says, "we spend a third of our lives on a mattress."

By 1978, Barragan had opened 1-800-Mattress, a small company consisting of himself and an assistant. They spent most of their time answering phone calls, and eventually the staff grew. By then, Barragan had figured that advertising would be key to success. He invested in print and radio campaigns. Two years later, he ran his first television commercial. Today, the company's yearly advertising budget has grown to $10 million.

A decade later, 1-800-Mattress had perfected the system of selling through toll-free calls with personalized attention, while a computerized inventory system helped improve efficiency and raised sales to $4 million. "The company consolidated that year," says Barragan, who six years later was running a nationwide enterprise. By then, he was being recognized for revolutionizing the concept of telemarketing.

Role model. In 1995, sales climbed to $55 million and the company had 300 direct employees and 90 contractors. Currently, 1-800-Mattress has direct operations in New York, New Jersey, Pennsylvania, Maryland, and Washington, D.C. as well as 400 distribution centers, 44 showrooms and numerous franchises across the country.

Barragan is cited as a role model for the private sector in Ecuador. "Napoleon Barragan's entrepreneurial success must be emulated by small, medium-sized and big-business owners so that they find opportunities and not threats in the free trade agreement Ecuador is about to sign with the United States," says Roberto Moss, president of the Ecuadoran-American Chamber of Commerce. At press time, the trade deal was pending.

Large producers of mattresses, beds and accessories have created alliances with 1-800-Mattress, among them Sealy, Serta, Simmons, King Koil, Nation's Pride, Tempurpedic, Spring Air, Hypnos and 1-800-Private Label, says Andreina Gonzalez, company marketing manager for 1-800-Mattress.

In 2005, the company sold more than $110 million and sales are expected to climb 15%, no doubt causing Sleepys, its closest competitor, some sleepless nights. The company claims celebrities such as Alexander Haig, Carly Simon, Cher, David Letterman, Donald Trump, Sylvester Stallone, Steven Seagal and others as clients, some of them paying up to $12,000 for custom-made mattresses. "Yet, 1-800-Mattress is available for everybody. We have the Try-Fol Bed, a folding bed that only costs $49," Gonzalez says.

It hasn't always been a walk in the park. One of the worst crises Barragan remembers was just after Sept. 11, 2001. Chase Manhattan, the company's main creditor, canceled a line of credit after the company fell behind on payments. The company then cut costs and began to recover in 2002. Since then, the business expanded, and there are plans to extend the model to Latin America, the Caribbean, Spain and Germany.

MARIA ELENA VERDEZOTO * QUITO, ECUADOR