Lex­ing­ton par­ent of Sleep Out­fit­ters files for bank­ruptcy

Lexington Herald-Leader - - Business - BY JANET PAT­TON jpat­[email protected]­ald-leader.com

The par­ent com­pany of Sleep Out­fit­ters, In­no­va­tive Mat­tress So­lu­tions, filed for bank­ruptcy on Fri­day in Ken­tucky.

Ac­cord­ing to the fil­ing in fed­eral bank­ruptcy court, Lex­ing­ton-based IMS is seek­ing Chap­ter 11 bank­ruptcy pro­tec­tion for re­or­ga­ni­za­tion.

In­no­va­tive Mat­tress So­lu­tions also owns Mat­tress Ware­house and Mat­tress King. Founded by owner Kim Knopf, the com­pany has 143 stores and more than 400 em­ploy­ees, ac­cord­ing to its web­site.

“Our stores are open for busi­ness as usual, and we are focused on tak­ing care of our val­ued cus­tomers,” said CEO Knopf in a state­ment. “IMS now has the back­ing of Tem­pur Sealy, one of the big­gest and best­known mat­tress man­u­fac­tur­ers, and a long­time sup­plier part­ner of our com­pany.“

Lex­ing­ton-based Tem­pur Sealy, a pub­licly traded com­pany, an­nounced Fri­day that it is pro­vid­ing up to $14 mil­lion in debtor-in-pos­ses­sion fi­nanc­ing to IMS to fa­cil­i­tate the bank­ruptcy, sub­ject to the court’s ap­proval.

Ac­cord­ing to Tem­pur Sealy, In­no­va­tive Mat­tress So­lu­tions has in­di­cated the re­struc­tur­ing “will in­clude op­ti­miz­ing its port­fo­lio of re­tail lo­ca­tions, and is an­tic­i­pated to be com­pleted dur­ing the first half of 2019.”

The com­pany did not say which stores or how many might be closed or sold.

Tem­pur Sealy is IMS’ largest cred­i­tor with more than $19 mil­lion in un­se­cured claims. Ac­cord­ing to the bank­ruptcy fil­ing, IMS has be­tween $10 mil­lion and $50 mil­lion in li­a­bil­i­ties with $10 mil­lion to $50 mil­lion in es­ti­mated as­sets.

Tem­pur Sealy In­ter­na­tional chair­man and CEO Scott Thomp­son said in a re­lease: “In­no­va­tive Mat­tress So­lu­tions has served over a mil­lion con­sumers and built eq­uity for their and our brands in their mar­kets. How­ever, we be­lieve iMS’ overex­tended re­tail foot­print and thin cap­i­tal struc­ture were not de­signed to ef­fec­tively re­spond to the com­pet­i­tive pres­sures of the re­cent re­tail en­vi­ron­ment. This caused the un­ex­pected need for bank­ruptcy pro­tec­tion. We will re­view strate­gic al­ter­na­tives re­lated to iMS dur­ing its bank­ruptcy process with a fo­cus on what is best for Tem­pur Sealy con­sumers in the af­fected mar­kets.”

In­no­va­tive Mat­tress So­lu­tions op­er­ates stores in Ken­tucky, West Vir­ginia, Ohio, In­di­ana, Ten­nessee and Alabama, ac­cord­ing to its web­site.

Ma­jor com­peti­tor Mat­tress Firm filed for bank­ruptcy in Oc­to­ber with plans to re­ject up to 700 leases and close about 200 stores.

PABLO AL­CALA pal­[email protected]­ald-leader.com

Sleep Out­fit­ters, fac­ing a Mat­tress Firm lo­ca­tion across Ni­cholasville Road, filed for bank­ruptcy on Fri­day. One rea­son: Too many lo­ca­tions and too much com­pe­ti­tion, ac­cord­ing to the com­pany.

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