Simmons plans to file for bankruptcy protection
JANESVILLE It will be business as usual at Simmons Co. in Janesville, the maker of Beautyrest mattresses that said Friday it will file for Chapter 11 bankruptcy protection in an effort to get new owners and lower its debt.
Simmons employs about 250 who work over two shifts at its Janesville plant.
In May, President Steve Fendrich assured workers in Janesville that the plant would not close when the company got new owners and restructured itself financially.
Fendrich reiterated that position Friday, saying the plant’s productivity and flexibility are second to none.
“Janesville is a world-class mattress manufacturer,” he said. “There isn’t another plant like that in the world.
“We’d be crazy to do anything with that plant.”
Sales have slumped for mattress makers as consumers cut spending.
Simmons’ plan is expected to reduce debt from about $1 billion to approximately $450 million.
The Atlanta-based Simmons said the restructuring includes the acquisition of Simmons Bedding Co., its subsidiaries and parent company Bedding Holdco by affiliates of private equity fund Ares Management and Teachers’ Private Capital, the private investment branch of the Ontario Teachers’ Pension Plan.
If Thomas H. Lee Partners, the current owner, does sell Simmons, Ares and Ontario Teachers’ will be the mattress maker’s sixth private-equity owner in 23 years, the Wall Street Journal reported Friday.
Even with the bankruptcy, Thomas H. Lee Partners still has profited from its Simmons investment, The Journal said. It paid itself two dividends of $375 million after it bought Simmons with an equity investment of $327 million.
Friday’s move gives Simmons a chance to get out from its debt and restructure to recover from falling sales and shrinking profit. Sales fell nearly 19 percent in the three-month period ending in June to $218 million, according to filings with the Securities and Exchange Commission. It posted a net loss of $5.8 million, compared to profit of $1.1 million in the same period last year.
For the first half of the year, sales are down 19 percent and Simmons lost nearly $9 million.
Material from Gazette wire services was used in this story.