Making Mattresses to Put People to Sleep is Big Business for this Sleeping Giant
At the age of 55, after nearly three decades of service in Kurl-on, a leading mattress company, where he joined as a shift superintendent for a salary of Rs 650, and rose to the level of president drawing a salary of a few lakhs of rupees with perks and perquisites, K Madhavan took a bold decision that his wife endorsed totally to his surprise.
Madhavan had decided to quit Kurl-on and join two others, who were planning to acquire a sick spring mattress unit in Coimbatore. “My wife told me it was the second time I was taking the correct decision in my life,” laughs Madhavan. “The first decision, of course, was the time I married her.”
His wife, who was manager of a nationalised bank then, knew about her husband’s role in building Kurl-on from a Rs 30 lakh turnover company to a Rs 550 crore turnover company. She told him he was like a banyan tree that had been pruned and kept in a flower pot.
She said, “You are supposed to grow in a forest and spread your branches far and wide.” If there had been any doubt in his mind about his plans to quit Kurl-on, it vanished into thin air as Madhavan heard these words from his wife.
After thirty years in Kurl-on, Madhavan stepped out of his comfort zone as an employee to embark on his entrepreneurial journey at a critical stage of his life. For, he had family commitments to fulfill. His elder son had just completed his engineering in electronics and communications and the younger one was seeking admission into an engineering college.
But Madhavan was confident that he would succeed as an entrepreneur. His belief stemmed from the vast knowledge he had acquired over the years in his field and the transition of Kurl-on he had overseen from a small unit in Bengaluru with 32 employees to a market leader in the mattress industry.
“I tell people who are starting their business, don’t say you are taking a risk. There is no risk at all if you know what you are doing perfectly,” says Madhavan, a sought-after business and motivational speaker in the country today.
“I always advise people to become a master in whatever they do and have a purpose in their life. If you are a master of what you are doing, you will win no matter what.”
Eleven years later, Madhavan, now the managing director and co-founder of Peps Industries, a Rs 325 crore turnover company, has built a mattress brand, which is growing at a 30 per cent CAGR, with 600 employees, 6,000 retail dealers, and a 56 per cent market share of spring mattresses in India.
“Today the company is valued at Rs 1500 crore,” shares Madhavan, now 68.
Back in 2005, when Coimbatore based Peps Industries came up for sale, Shankar Ramm, a mattress-based products supplier to Kurl-on from Hosur conveyed the information to the latter. However, Kurl-on did not show interest in purchasing Peps, as the company was making spring mattresses and they were into rubberized coir mattresses.
Shankar decided to buy the unit himself and then persuaded Madhavan, whom he knew since the late 1980s when he started doing business with Kurl-on. He remembers the day he approached Madhavan and dared him to leave Kurl-on and join him in running Peps.
“He said he needed some time to think, so I and Manjunath (the third co-founder of Peps) acquired the company for Rs 3.25 crore,” says Shankar. “Madhavan invested Rs 40 lakh in the company and joined us later.”
Madhavan describes the turn of events in his life as serendipity. “Until Shankar invited me to join him I had never thought of starting my own company. I was already 55 and I thought I would work in Kurl-on for the rest of my life,” says Madhavan, who recalls Shankar’s response when he had advised him to take over Peps and run the company himself. “Impossible, it is you who can build another Kurl-on,” Shankar had responded.
Madhavan came on board Peps and the rest, as they say, is history. Spring mattresses accounted for just two per cent market share in the Indian mattress industry those days. Coir, cotton and foam mattresses dominated the market. But Madhavan and his partners saw an opportunity in the scenario and a market that was waiting to be tapped.
Madhavan points out that majority of people in developed countries use spring mattresses, but Indians back then associated spring mattresses with cheap spring sofa-cum-beds that lost their tautness after a few months usage.
To address this perception issue they started to make spring mattresses of international quality at an affordable price and explained the advantages of spring mattresses over the other mattresses to their dealers, who in turn educated the customers.
Madhavan adopted other strategies as well. “The hand that sold a million mattresses,” he says, created a new logo for the company and did away with the staid plastic covers for new mattresses and designed an attractive packaging for their products.
Peps’ range of products increased from a mere two in 2006 to more than 30 now, which includes pillows and blankets. “We have three main layers of products - the affordable luxury range priced between Rs 9,500 and Rs 22,000, the US brand Restonic range customized to Indian conditions priced between Rs 25,000 and Rs 45,000, and a health range, Peps Spine Guard, priced between Rs 30,000 and Rs 40,000,” says Madhavan.
Additionally, the ultra luxury range is targeted at high-end customers and products in this category are priced between Rs 55,000 and Rs 1.5 lakh. At the other end of the spectrum is the Hypnos range that starts from Rs 8,000 and goes up to Rs 35,000.
Peps also caught the imagination of the customers with their Great Sleep Stores. These are retail outlets of the company, but have been designed to offer a totally new experience to the customers. “There are 125 outlets around the country, where we display our products in a bedroom ambience. Customers can literally roll over the mattresses on display and choose the product they like,” says Madhavan.
The company’s main production plant is at Coimbatore, where they have a 3 lakh sq ft facility in a 11-acre property with world class machinery. There are smaller units in Delhi, Pune and Kolkata.
For Madhavan, who has a beautiful house in Bengaluru, located on a two-acre plot with a one kilometre jogging track, painting is a hobby and stress buster. He has a studio and a huge collection of paintings at home.
Madhavan was born into a large family, where he was the seventh child among eight siblings. His father was a humble lab assistant at Indian Institute of Science, Bengaluru, and the family lived hand to mouth in a rented home.
"I studied in ordinary schools, not in a convent like Bishop Cotton,” laughs Madhavan. He studied in Kannada medium till Class seven and switched to English medium from Class eight when he moved to a government school in Malleswaram.
His mother, a housewife, was well-versed in Mahabharat, Ramayana and Bhagvatam and recited stories from these epics to her children daily. “It is only because of my mother that I have reached this level in life,” says Madhavan, turning emotional. “She taught us values, the importance of wisdom and applying it practically in daily life.”
Madhavan completed his BSC Chemistry (Honours) from Central College Bangalore and got a job at a rubber footwear manufacturing unit in Kolkata for a salary of Rs 250. Three years later, around 1976-77, he joined Kurl-on as a shift superintendent.
During his stint at Kurl-on, Madhavan continued to upgrade his knowledge as he kept moving up the corporate ladder. He took part-time courses and completed a PG diploma in polymer technology from Indian Rubber Institute, Mysuru Chapter, and then a six-month certificate course from Indian Institute of Science in proficiency in general management.
When he rose to the position of general manager, he wished to do an MBA, which he got to do at SP Institute of Management and Research, Mumbai, with the active support of Kurl-on management.
“For 36 months every Friday morning I flew to Mumbai to attend the weekend classes and returned to Bengaluru Monday morning to attend to my work. The Kurl-on management bore all my expenses,” he says gratefully.
For the ever optimistic Madhavan, the Rs 6500 crore mattress market in India is up for grabs and he says the next five years will take their company to greater heights. Well, watch out for this sleeping giant.
This Article is Part of the 'Amazing Entrepreneurs' Series
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