Tuesday, August 07, 2007

Allergy-Free Mattresses As A Niche


Gary Goldberg's aha! moment came in the spring of 2004, when Dr. Robert Klein, a pediatrician at Rhode Island Hospital, told him how difficult it was to combat allergen-related illnesses. Those conversations, coupled with Goldberg's own 8-year-old son's struggles with allergies, left the third-generation textile specialist convinced there was a big market for products to serve the 60 million U.S. allergy sufferers.

Today, 37-year-old Goldberg is president of East Providence (R.I.)-based CleanBrands, which has developed a unique line of mattress and pillow covers, called CleanRest encasements, that prevents sleepers from inhaling allergens, like dust mites, that live in their beddings naturally.

After two successful tests in Bed, Bath, & Beyond stores from February through August, 2006, CleanRest products were rolled out in all 850 of that retailer's stores in September. And last November, Goldberg wrapped up $9 million in venture funding. In the first half of this year, the company had revenues of $2.9 million. CleanRest, which also protects against bedbugs, is the first encasement series to win asthma prevention certification from the Asthma & Allergy Foundation of America. Mike Tringale, director of external affairs at AAFA, says of 15-person CleanBrands: "They have trumped the industry standard."

Early on, Goldberg noticed that many existing encasement products were impermeable vinyl or plastic fabrics that were uncomfortable to sleep on and ripped when washed. Other encasements made of woven fabrics had pores that were too large, allowing allergens inside the mattress to slip through and into the sleeper's air. Goldberg's breathable, washable variation is made of durable micro-denier polyester adhered to a film that has no pore larger than one-thousandth of a millimeter in diameter--too small for allergens to penetrate.

For a year and a half, Goldberg went through a trial-and-error process of devising the best mix of fibers, adhesives, and films using factories in South Korea to create the fabric and in Mexico to sew it together (in August, 2006, he moved sewing operations to China). By Christmas, 2005, Goldberg developed the right fabric cocktail and approached Alan J. Natowitz, vice-president and general merchandise manager for Bed, Bath & Beyond. Within an hour, the two agreed in principle to test CleanRest in 30 stores.

With that initial test looming, Goldberg--who had already invested nearly $750,000 of his own cash designing and manufacturing the encasements--realized he needed a financial partner. So he turned to Gill Broome, a managing partner with Northbridge Equity Partners, whom he had met through a friend. Besides an initial $9 million investment, Broome, now chairman of CleanBrands' board, believes he will pump an additional $30 million into the company over several years. "This is an example of a good story and a good business idea," says Broome. "We are creating a brand name."

Goldberg says he functions as the face of the company while his employees, most of whom are in their late 30s and early 40s, are given autonomy to manage the day-to-day activities of product development, quality, and delivery. Says Goldberg of his team: "I want people to express their individuality.... Good leaders say [to their employees]: 'What do you think?' Not, 'Tell me what I think.'"

Since late June, CleanRest has expanded its distribution and can now be found in 150 Target stores in Southern California and the Atlanta area. Although Goldberg hopes someday to expand into other allergen protection goods under the Clean banner, rolling out his current line is Job One. "I know we have a great product," he says of the CleanRest series. "The adventure for me is to convince the consumer."

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