ReDream CEO: Consolidation unlocks ‘enormous’ untapped opportunity in sleep market

NEW YORK – Bringing together four direct-to-consumer sleep brands under one umbrella will create a scalable platform to reach “an enormous amount of untapped opportunity,” says Joe Megibow, CEO of the recently launched ReDream Brands.

“I think any one of these businesses could double or triple their business without adding a ton of overhead,” he said. “The hard part is getting that reach – you can’t just go from one to 10 overnight. That’s where consolidation comes in. We looked out there and said who are the leaders?”

ReDream Brands brings together The CPAP Shop with cpap.com, sleeping.com and Lofta, with a combined volume of more than 700,000 customer orders annually.

Megibow spoke with HME News recently about the enormous potential to “get it right for our customers.”

HME News: What was the driving force bringing together these particular businesses?

Joe Megibow: It’s relatively straightforward to scale these kinds of businesses in terms of operations. The hard part is actually getting that reach – you just can't go from one to 10 overnight. So we looked out there and said, who are the leaders? And one of the things that we looked at is how much overlap there was (among the businesses). And it turns out there was less than 10%. So, we’re all casting a nice net out there.

HME: How will such a board platform drive efficiencies for ReDream Brands?

Megibow: We're basically about five times bigger than our next largest competitor. With that scale, it means we can reach more consumers much more efficiently. We can service them better. We've got warehouses now in West, Central and East locations, so whatever brand you buy from, we can have product close to you, get it to you quickly, and, from our side, get it to you efficiently in a way that hasn't existed in this category.

Because of the scale, we can take on more calls; we can better service the patients. It’s all the benefits of scale, which both improves our business economics, but also substantially improves our ability to service the patient, which is what this is all about. 

HME: You talk a lot about opportunity. Where are you seeing the greatest opportunities in the market?

Megibow: There's two sides. There's (the patient) new to getting help and not even sure where to begin. And there's a wide array of treatment options and even alternative treatments if you're not sure you're ready for a CPAP machine yet. So, how do (we) create a really great consumer experience where (the patient) can determine, “What's my level of need and what's right for me?”

The other side is that most of the treatment out there is determined by insurance. And that means you get generally the kind of the machine that gets assigned to you – one machine, once every few years. What we've seen is, there is a large demand out there for more than one machine. And insurance isn’t going to pay a penny of that.

HME: How is your retail background going to shape your vision for ReDream?

Megibow: It starts and ends with, what are the needs of our customers and how do we best service them? We build loyalty by treating our customers with respect, not just as transactions. This isn’t about insurance contracts. Our customers vote with their wallets every day and this just gives us scale to do so much more for them.