Mattress maker Serta Simmons Bedding LLC has filed for Chapter 11 bankruptcy to restructure its debt.
The move by the Doraville, Ga.,-based company will reduce its funded debt from $1.9 billion to $300 million through an agreement with key financial stakeholders, the company said in a Jan. 23 announcement.
It says the arrangement, which includes access to $125 million in capital, will enable the business to continue making “critical investments” in its business and brands. It stressed that it continues to operate as normal, with orders still being fulfilled by its manufacturing facilities. New product launches are still planned for later this year.
“After the conclusion of this process, we will have a stronger financial foundation to drive profitable growth and continue delivering the high-quality, innovative products that our company is known for,” CEO Shelley Huff said. “Looking ahead, we will remain focused on launching new innovations, further building a high-performing and resilient supply chain and expanding the commercial side of our business to meet demand for our trusted brands and products.”
Although it had sales of $2.4 billion in 2022, it has had financial problems for a while. In 2020, it underwent a restructuring that brought in $200 million of additional capital, citing supply chain issues and raw material costs. However, it faced lawsuits after some lenders were prioritised for repayments.
The company operates more than 20 manufacturing sites in the U.S.
Serta Simmons Beddings owns several of the U.S.’s largest mattress brands, including Serta, Simmons, Beautyrest and Tuft & Needle, which it acquired in 2018. Serta and Simmons were brought together in 2012 by the private equity company Advent. The group employs 3.600 people.