Surprise bankruptcy for Dial-a-Mattress – QNS.com

Surprise bankruptcy for Dial-a-Mattress

Apparently, the last “S” stood for “surprise” for Dial-a-Mattress Operating Corporation executives, who entered into an involuntary Chapter 7 bankruptcy petition last week after creditors Sealy, King Koil and a Commack, Long Island landlord filed in court for a reported $1.7 million.

“It was a total surprise to us, because we thought we had been communicating with our vendors,” said Joseph Vicens, Executive Vice President and Chief Operating Officer.

The corporation, operating as 1-800-MATTRESS and based out of Long Island City, converted the filing to Chapter 11 as of Monday, March 23, and plans to merge with Sleepy’s, which will purchase a portion of its assets, pending court approval.

Vicens explained that because of business conditions, the faltering economy, and the industry as a whole – which, he said, is down 20 to 30 percent from last year – the 33-year-old company had been hit hard.

December of 2008 was worst, he said, with the company seeing a slight increase in January and February of this year.

Another factor, he said, was the sudden death of Luis Barragan, 34, in a swimming accident in 2006.

At the time of his death, he served as President and Chief Operating Officer for the company founded by his father, Napoleon Barragan, in 1976.

“It definitely had an effect,” said Vicens, who explained that Dial-a-Mattress is a family-run business. “Not only was it a huge loss, but a parent losing a son took a toll on the human side. [We had] a difficult time rebounding; the economy and the industry put the final nail through.”

One year ago, Vicens said, Dial-a-Mattress employed 300 people; today, that number is 180. Many have been with the company multiple years.

“We did take some action over the last 12 months, especially the last six months” to downsize and minimize the risk of bankruptcy, Vicens explained.

Fifteen stores were closed and management even took a 30 percent pay cut, he said. This did not affect sales, warehouse workers or customer service.

The company’s independent franchise, Consolidated Mattress and Amalgamated Mattress, with locations in New England, Philadelphia, central and southern New Jersey and parts of Florida; and Rectangle Corporation, in Windsor, CT, were not affected by the filing, according to a spokesperson.

“We were in a position where we thought we had made a lot of progress,” said Vicens.

The involuntary filing forced the company to move up their plans.

“We believe we made the right strategic decision in terms of the partner we chose [with Sleepy’s],” said Vicens. “There’s a very positive feeling in the organization. One thing we haven’t been able to accomplish it to bring it to the next level.”

The potential alliance with Sleepy’s, he feels, will achieve that.

“The difference will be the capital management support from Sleepy’s,” said Vicens. “We will expand business by putting together a national marketing plan and create more sales.”

And, he continued, “Due to the fact that we will expand on a national basis, we may need more people.”

In the meantime, he assures customers that 1-800-MATTRESS and 1-800-MATTRESS.com are fully operational.

“We have not missed one delivery since this all started,” Vicens told The Queens Courier, explaining that customers come first. “We are confident that we are able to get through this. At the end of the day we believe we’ll have a much stronger company.”

A representative for Sleepy’s was not available for comment as of press time.

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