Mattress Discounters Begins Restructuring Process
TRINITY, N.C., Oct. 23 /PRNewswire/ -- Mattress Discounters Corporation, one of Sealy's largest customers, today announced that it had filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. Mattress Discounters, subject to court approval, has arranged for debtor-in- possession (DIP) financing through direct loans from its current shareholders that will fund operations during the reorganization process. Mattress Discounters remains open for business and anticipates no change to normal operations during the reorganization. "We believe that Mattress Discounters will successfully restructure its business," said Dave McIlquham, Sealy's Chief Executive Officer. Sealy has agreed to enter into a new supply agreement, subject to court approval, under which Sealy may provide Mattress Discounters with up to $3 million of credit terms. As part of its filing, Mattress Discounters has asked the court to approve a contract allowing for the sale of its stores in San Francisco, Sacramento, and San Diego to California-based Sleep Train, another large Sealy customer. Sealy has negotiated a supply agreement with Sleep Train covering any stores that Sleep Train may acquire from Mattress Discounters in California. "Mattress Discounters' business in its core markets is very attractive to prospective buyers," added McIlquham. "We expect that Mattress Discounters will no longer be a Sealy affiliate following the restructuring. We look forward to expanding our relationship with Sleep Train as well as with any buyers that may emerge in other markets." Sealy is the largest bedding manufacturer in the world. Including its subsidiaries, Sealy has 31 manufacturing plants in the United States, Canada, France, Italy, Brazil, Argentina and Mexico. There are a total of 11 international licensees operating in Australia, Israel, Jamaica, Dominican Republic, Saudi Arabia, Japan, New Zealand, Thailand, South Africa, the Bahamas and the United Kingdom. In addition to its licensees, Sealy has a joint venture in Southeast Asia, India and Korea. Sealy produces and sells a full range of mattresses under the Sealy, Sealy Posturepedic(R), Stearns & Foster and Bassett brand names. Sealy-branded licensed products include crib mattresses, sheets, pillows, mattress pads and comforters, and futons. More information on Sealy, Inc., can be accessed at http://www.sealy.com. This news release contains forward-looking statements concerning Sealy's future relationship with Mattress Discounters and Sleep Train. These statements are subject to various risks and uncertainties, some of which are outside the company's control. Among the factors that could cause actual results to differ materially from those forward-looking statements are changes in Mattress Discounters plans, whether the Bankruptcy Court and Mattress Discounter's bondholders approve the plan currently being proposed by Mattress Discounters, changes in the business performance of Mattress Discounters or Sleep Train, or changes in the economic or financial conditions in the world or the market. We do not assume any obligation to update these forward- looking statements. Make Your Opinion Count - Click Here http://tbutton.prnewswire.com/prn/11690X70954351
SOURCE Sealy, Inc.
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