Dive Brief:

• Williams Sonoma-owned West Elm is partnering with Leesa Sleep to feature Leesa mattresses in the retailers' more than 80 U.S. West Elm locations and online, according to a West Elm pres release.
• The mattress startup replaces West Elm's prior mattress partner Casper following the announcement of a brick-and-mortar expansion by the brand and an investment by Target in the growing company.
• Additionally, Leesa will donate 1,000 mattresses to charitable organizations in communities where West Elm operates stores and continue to donate one mattress for every 10 sold as a part of Leesa's "One-Ten" social impact program.

Dive Insight:

In July 2016, West Elm grandly announced its newest collaboration with online mattress industry disrupter Casper. The collaboration was hailed by both sides as an opportunity to bring Casper's cool, wired clientele to West Elm's stores while allowing West Elm's millennial customers to try out the internet mattress brand. Now just a year out, it seems the relationship has ended. 

According to West Elm, the move is all about Leesa's commitment to socially conscious giving. "We are always seeking new ways to give back, while giving our customers the power to make positive social and environmental impacts with their purchases," Don Macciocca, West Elm VP of merchandising, said in a statement. "We recognized in Leesa a shared vision of giving back and helping people sleep better." Macciocca pointed to Leesa's One-Ten program in particular. "This just felt like another great step toward more responsible retail practices," Macciocca said. In a press release about the partnership, Leesa's co-founder and CEO David Wolf echoed the sentiment that the two brands shared a similar vision about socially conscious giving.

Naturally the tones were equally cheery a year ago when Taryn A. Laében, Casper's chief experience officer and president of global retail and business development, told Retail Dive, "West Elm is very much geared towards an urban dweller, and a city-goer who has a real interest in design." But a lot has changed for Casper in the past year.

In May, Casper received a $75 million investment from Target after declining Target's $1 billion buyout offer. As part of its Target deal, Casper became the only mattress sold online at Target.com and began showcasing its mattresses and other accessories in some Target locations. 

With the big-box retailer's extensive reach, it's likely that Casper simply decided to cut ties with West Elm when a better deal came along. It's also possible West Elm cut ties when Casper began courting another retailer — but it's hard to speculate on why the deal broke up, Greg Portell, lead partner in the retail practice of A.T. Kearney, a global strategy and management consulting firm, told Retail Dive.

"The issue could range from divergent strategies or supply chain disruption to how profits are divided. Casper’s distribution arrangement with Target likely had little impact. West Elm mostly competes for a different set of consumers and shouldn’t be threatened by product placement at Target," he said. "A bigger issue might be Target’s investment in Casper. With Target in a position to benefit from valuation gains as well as having influence over Casper’s executives, the potential for conflicts is there. Retailers don’t want to help build a brand that will so directly benefit another retailer."

There's also the possibility that both brands simply found better fits elsewhere. For his part, Macciocca said the Target deal impacted West Elm's decision-making "not at all." Rather, he positioned the partnership as somewhat of a trial run for both companies. 

Certainly, neither the Casper nor the Leesa partnership will have a significant impact on West Elm's bottom line. At least not at first, and not directly. "With niche brands such as Casper and Leesa, West Elm shouldn’t be counting on either to be large traffic drivers," Portell said. "Rather, the arrangements are easy ways for West Elm to build out their product lines with high quality offerings without having the complexity of managing the category directly. Leesa is well-funded, and has a strong product and a growth trajectory that suggests it should be a good option for West Elm. Brands across all categories will change alliances and distributions with increasing frequency moving forward. I don’t see any concerns with the switch from West Elm’s point of view."

There may be more to the new partnership than simply aligned values, however. "Considering the potential benefits that West Elm can offer Leesa as the company grows, it wouldn’t surprise me to see West Elm take a more active role in building Leesa’s brand," Portell said. "An increased voice at the table was probably and appealing part of the arrangement for West Elm. It wouldn’t surprise me to see an expansion of the Leesa brand into adjacent categories much like Target has done with Casper."

Regardless of how the new partnership plays out, though, the change in direction raised certain questions about what drove the shift it in the first place. Portell said that tone of the partnership switch might indicate that West Elm plans to support the transition with a more aggressive marketing program than they may have in the past.

There might even be an investment opportunity for West Elm in this new arrangement, Portell added "Perhaps [West Elm] becomes more active in marketing the connection than they were with Casper," he said. "Who, for example is responsible for managing the category? West Elm or Leesa? It wouldn’t surprise me if Leesa assumes more active accountability for category development within West Elm." If that's the case, it would certainly open new possibilities for both brands, much as the Target partnership has expanded Casper's reach. So perhaps ultimately, all parties involved — Leesa, Casper, West Elm and Target — just needed to find the perfect fit.