Serta Simmons Bedding said in a release that it will emerge from bankruptcy “in the near future,” having substantially reduced its secured debt from approximately $1.9 billion to $315 million. This is still $15 million more than it had planned to secure in January when it first filed.
“With the court’s confirmation of our [restructuring plan], SSB will emerge with the financial resources and flexibility to continue to drive forward our strategic growth initiatives and further bolster our leadership position in the market,” CEO Shelley Huff says in a statement. “Throughout the process, we advanced our strategic priorities by introducing new products, investing in marketing, strengthening retail partnerships, operating a high-performing supply chain, and making critical additions to our executive leadership team.”
The move will also lower the company’s annual cash interest expense by more than $100 million, but coming back may not be as easy as it once could have been. In addition to the debt it still owes, it now has to compete with a new Tempur Sealy/Mattress Firm combo coming early next year.
Representing some 19% of U.S. bedding sales, SSB has a number of well-known brands that in addition to Serta and Simmons, include Beautyrest and Tuft & Needle that collectively accounted for $2.4 billion in sales for the 12 months ended in June 2022. The company is also one of the largest employers in the industry with more than 3,600 employees.
According to a declaration filed by Chief Financial Officer John Linker, the company sells to about 2,200 independent retailers in the U.S. that include mattress specialty stores, furniture stores, department stores, furniture rental stores, mass merchandisers and juvenile specialty stores. In addition, the company sells to the hospitality channel including hotels, casinos and resort properties, through SSB Hospitality.
In comparison, the Tempur/Mattress Firm deal created a company with a 3,000-store global footprint, 30 e-commerce platforms, 71 manufacturing facilities and four R&D facilities, serving customers in more than 100 countries.
During the bankruptcy period, SSB filled two key C-suite jobs in April — Guy Longworth joined the company to lead its marketing initiatives and Brian Dengler to lead innovation strategy.