Net profit plunges 26% and 400 stores exit — why is "sleep king" DeRUCCI (慕思) clinging to Huawei (华为)?

The shock: shrinking profits and a retail squeeze

It has been reported that DeRUCCI (慕思), long billed in China as the "sleep king", saw its net profit fall about 26% year‑on‑year and has been forced to close or withdraw roughly 400 retail outlets as it restructures channels. The numbers have prompted an abrupt strategic pivot: DeRUCCI is reportedly doubling down on a deep partnership with Huawei (华为), moving aggressively into smart mattresses and connected sleep systems. Short sentence. Big move.

Why a mattress maker is cozying up to a telecom giant

Why would a bedding brand embrace a telecom and device giant? For Western readers: Huawei is not just a handset maker — it operates one of China's largest smart‑home and cloud ecosystems (including HarmonyOS) and, despite US sanctions on its chip supply chain, remains dominant in domestic consumer infrastructure. DeRUCCI's reported play is to use Huawei's hardware, software and channel reach to add value to a slowing core mattress business — sensors, sleep tracking, in‑home integration and bundled services that command higher margins. It is a classic retail-to‑services pivot seen across Chinese consumer brands. Reportedly, the partnership also helps DeRUCCI access Huawei's enterprise and carrier clients for hospitality and health‑care channels.

Geopolitics and the trade backdrop

There is a geopolitical angle too. Partnering with Huawei signals alignment with a domestic tech stack at a time when Western suppliers are wary and export controls on advanced chips persist. That may secure supply and local ecosystem support, but it limits international expansion where Huawei remains constrained. Reportedly, some investors worry DeRUCCI is substituting product differentiation with tech branding to paper over structural demand weakness in China's furniture and home markets.

The bottom line: lifeline or last gasp?

Is this a growth strategy or panic? The quick answer: both. Leaning on Huawei could accelerate DeRUCCI's move into higher‑margin, subscription‑style services and keep it relevant to younger, connected consumers. But it also reveals how much pressure the traditional mattress model is under — lower footfall, channel rationalization, cost pressures. Watch the metrics: same‑store sales, smart product attach rates, and gross margins on connected offerings. Those will tell whether this is a durable reinvention or a tech halo hiding deeper retail woes.