Investment firm Coliseum Capital Management and Purple have resolved their disagreement
Purple Innovation Announces Changes to Board of Directors and Strategic Partnership
In a significant move, mattress company Purple Innovation has announced changes to its board of directors and a strategic partnership with activist investor Coliseum Capital Management.
At the upcoming 2023 annual meeting, Scott Peterson is slated to replace Dawn Zier, who previously announced her intention not to stand for reelection. The board will be reconstituted to eight members, with Hoby Darling, Carter Pate, Erika Serow, and Robert DeMartini, the current CEO, remaining on the board. Hoby Darling, Carter Pate, and Erika Serow are new additions to the board, previously nominated by Coliseum.
The partnership with Coliseum is part of a broader effort to evolve and mature the company. According to Robert DeMartini, the need for the company to sell the health and wellness benefits of a good night's sleep has been emphasised.
Purple has also established a cooperative governance framework with Coliseum, which includes agreements where Coliseum gains board representation and voting rights in exchange for a collaborative approach. Coliseum will not exceed 44.7% ownership in the company through its 2024 annual meeting. Adam Gray, a managing partner at Coliseum, has been named board chair, replacing Paul Zepf.
The overall business of Purple has declined as the COVID-19 pandemic receded and people spent less on home goods. In an effort to gain market share in the premium end of the mattress business, Purple now offers mattresses priced from $1,000 to $7,500.
Gary DiCamillo, Purple's Lead Independent Director, expressed pleasure at the agreement with Coliseum. However, the exact nature of the governance framework between Purple and Coliseum, and how it has concretely impacted the board and ownership structure, is not currently known.
In March, Purple reported that fourth quarter revenue fell 22.2%. For the full year in 2022, the net revenue fell 20.7% to $575.7 million, while operating loss grew 72.4% to $40.3 million. The net loss was $89.9 million for the year, down from a profit of $3.9 million the prior year. The agreement between Purple and Coliseum ends Coliseum’s battle to take control of the company, which began last fall.
These changes mark a new chapter for Purple Innovation as they continue to navigate the competitive mattress industry.
- The COVID-19 pandemic has led to a decline in Purple's overall business as people spent less on home goods.
- In an attempt to gain market share in the premium end of the mattress business, Purple now offers mattresses priced from $1,000 to $7,500.
- The partnership with activist investor Coliseum Capital Management is part of Purple Innovation's broader effort to evolve and mature the company, emphasizing the health and wellness benefits of a good night's sleep.
- As a result of the strategic partnership, Adam Gray from Coliseum has been named board chair, replacing Paul Zepf, and Coliseum will not exceed 44.7% ownership in the company through its 2024 annual meeting, under a cooperative governance framework.
