Entrepreneur seeks to disrupt the marketplace as he sets out expansion plans

A Leeds-based entrepreneur says his bed-in-a-box concept is continuing to disrupt the retail marketplace as he reaches for annual revenues of between £8m and £10m this year and expands into Germany. 

Michal Szlas, founder and CEO of online mattress retailer Otty, set up the business in 2016 and in its first year the firm recorded pre-tax profits of £70,000 on revenues of £1.7m. This year, Szlas, who moved to Yorkshire from Poland when he was 14, said his vision and growth plans means the firm is projected to turnover £8-£10m this year.

This growth includes an overseas expansion with the opening of a new office in Berlin, which will help the company tap into the European market following its successful growth in the UK. After this, he has his sights set on expanding to the Netherlands. 

Szlas said the concept for setting up the business was to provide a product that people could buy online, but that also had a focus on the quality of the mattress. As a former keen free runner and active person, he felt that having the right mattress to sleep on was essential.   

The firm secured £1.5m of investment in January to invest further in its factory in China. It is placers orders of between 2,000 and 3,000 units monthly from the factory and once in the UK Otty works with delivery firms to dispatch across the UK.

Otty has secured a trial with Next to sell the mattresses in three of its UK stores and it also has a Leeds showroom; but otherwise, sales come direct from online consumers – who also get to try out the product and return if not right for them.  

“We aren’t the first online mattress company but we are all disrupting the traditional retail stores. While we have some products in stores, we are trying to keep the focus online” said Szlas, who said himself that it would have been hard to believe years ago that people would buy a large, expensive and personal product online before trying out in a store first. 

“But it is all about trust and convenience. It is also important to be transparent and honest – then reviews help to boost sales. People buying online have to have that trust,” he added.

“I feel we are different to everybody else because I have found the right supplier and focused on product quality. We are also certainly the best priced.”

Szlas now employs eight people at the firm, including his brother, and this will expand as the business moves into German and Dutch markets. Of setting up the business, the 25-year-old said: “The first year was run on a shoe string. I was able to use money from a previous business which was good because as a new business, getting credit was one of the biggest things. It showed me that unless you raise decent money or grow slowly as a business, it is extremely tough.”

Of the German expansion, he said:  “Before deciding on moving to Germany we undertook a great deal of analysis of the marketplace there, which told us we had to create something different to meet the demand of its consumers. We developed new products to meet these requirements and feel confident they can replicate abroad the success we’ve had at home.

“Our Leeds office will still act as our headquarters, but having a presence abroad allows us to take the next steps to fulfilling the ambitions we have as a business. Having analysed the German marketplace, we feel there is a real opportunity for us to get a foothold overseas and develop our products and the brand further.”

Szlas, who set up his first business after school selling mobile phone holders to large firms including Nissan and Renault, plans to be a serial entrepreneur and has ambitions to grow the business more before exiting and setting something new up, as he feels this is where his skill set lies.