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March 26, 2009 - Consolidated Mattress and
Amalgamated Mattress, better
known as the franchise operator
of
1-800-Mattress/Dial-A-Mattress
in New England, Philadelphia,
Central and Southern New Jersey,
and Florida, has challenged the
proposed sale of its New
York-based franchisor to
longtime rival Sleepy’s.
The franchisee is offering the
franchisor better terms on
“Debtor-In-Possession” (“DIP”)
financing than offered by
Sleepy’s earlier this week.
Consolidated and Amalgamated, an
independent franchise group,
whose operations remain entirely
outside the present bankruptcy,
is operating “business as
usual,” and has a strong
financial position.
The offer was for financing on
similar terms, but without the
onerous restrictions Sleepy’s
placed on the funds in its
proposal.
Consolidated/Amalgamated
President Robert Klein
commented, “The financing we’re
offering is superior to that
proposed in court on Monday in
that it contains none of the
poison pills.” He went on to
say, “The maneuvering that has
taken place is highly unusual,
and not in the best interests of
anyone but Sleepy’s. Before you
hand your business to your most
aggressive competitor, there
needs to be thoughtful
consideration given not just to
creditors and business
interests, but also to the
interests of consumers who would
face an effective monopoly in
many markets.”
Klein explained, “The franchisor
is trying to push through a
backroom deal that it cut with
Sleepy’s prior to filing
bankruptcy whereby the people
who ruined the company would get
big paydays, and the creditors
would be left holding the bag.”
He added, “There has been no
impact whatsoever on our
operations, period. Other than
using the 1-800-Mattress name,
we are a separate and
independent company. And we are
in a strong enough cash position
to offer this financing
ourselves, continue to run our
own operations as normal, and
bid for the parent company too.”
“It’s rare for a franchisee to
be in a position to rescue its
franchisor.” said Klein. “If we
have the opportunity to
strengthen our position while
preserving fair competition in
the marketplace, we intend to do
that.”
Klein explained that his company
has separate contracts with
Sealy, Serta, Simmons, Spring
Air, Tempur-Pedic and other
suppliers, is current with all
payments, operates its own fleet
of trucks for delivery, its own
sales and service call center,
and will continue to fulfill
orders placed over the phone or
online as normal.
Consolidated/Amalgamated was
recognized by the Better
Business Bureau of Eastern
Massachusetts, Maine and Vermont
with its coveted “Torch of
Excellence Award” for honesty,
integrity and ethical business
practices in the marketplace
three years in a row.
The company also runs an
extensive corporate philanthropy
program, contributing cash and
merchandise to the communities
it serves, focusing lately on
assisting homeless and military
veterans’ causes.
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