Simmons going to bed with Serta’s owner

Ares and Teachers’ also own National Bedding Co., the largest maker of bedding sold under the Serta brand name.

Privately-held Simmons, which moved its headquarters to Atlanta in 1975 and has manufacturing operations in Waycross, has been hit by a sales decline caused by the recession and housing slowdown.

Simmons posted a net loss of $3.2 million and sales fell 19.6 percent to $223 million in the first fiscal quarter 2009. The company said, however, that it has gained market share for 13 consecutive quarters through March 2009.

The Simmons and Serta brands would continue to operate independently and compete for business under the planned deal, the company said.

Simmons has 17 plants in the U.S. and three in Canada, and employs 432 people in Georgia at corporate, research and development and manufacturing facilities.

Under the bankruptcy filing, which the company said is expected in the next 30 to 60 days, Simmons’ debt would be restructured, reducing its total indebtedness to $450 million from $1 billion. Vendors, suppliers, employees and senior bank lenders are to be paid in full under the plan.

Simmons president and chief operating officer Stephen G. Fendrich said the deal would strengthen the company’s balance sheet and allow the brand to retain its identity.

The plan needs approval of the bankruptcy judge as well as expiration of the waiting period under federal antitrust law.

Ryan Trainer, executive vice president of the International Sleep Products Association, said three key factors determine bedding sales: housing starts and sales; disposable income; and wealth.

“In this recession, all those have been hit hard,” he said. “It’s a very competitive area and this industry has been under a lot of financial stress.”

Trainer termed bedding a “deferrable” purchase, adding, “2008 was not a good year.”