Mattress Discounters Begins Restructuring Process

Oct 23, 2002, 01:00 ET from Sealy, Inc.

    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
     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
     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.
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SOURCE Sealy, Inc.