No. 2 mattress retailer Sleepy's sets up in Md.

BUSINESS DIGEST

August 08, 2007|By Stephanie Newton | Stephanie Newton,Sun reporter

Sleepy's Inc., a privately held mattress retailer, is moving into Maryland and taking over 14 stores it acquired through the bankruptcy of New Jersey-based Rockaway Bedding Inc.

Bethpage, N.Y.-based Sleepy's opened stores in Westminster, Bel Air, Towson and Timonium last week. The remaining 10 stores will open throughout the state by Columbus Day, said Mike Bookbinder, executive vice president of Sleepy's.

The mattress retailer, which has 471 stores in eight states, is in the midst of expanding along the East Coast.

The company is opening six stores in Delaware and seven in Virginia. It also plans to expand the list by year's end, Bookbinder said yesterday.

Americans spent $6.8 billion on mattresses last year, up from $6.5 billion in 2005, according to data released by the International Sleep Products Association. But the mattress retail market has seen consolidation during recent years as larger competitors buy out smaller chains.

Sleepy's is the second-largest mattress retailer behind Minneapolis-based Select Comfort Corp., according to a 2006 ranking by trade publication Furniture/Today, said David Perry, the magazine's bedding editor.

Select Comfort, which has 11 stores in Maryland, had revenue of $676 million in 2006 while Sleepy's had $430 million, according to data compiled by Furniture/Today, Perry said. Rockaway Bedding was 13th on the list with revenue of $129 million.

Jack Disanza, vice president of operations at Rockaway, said yesterday that his company suffered when the economy slowed last year. He said it couldn't compete with larger companies such as Sleepy's in terms of advertising and other marketing.

"We weren't in a good enough financial situation to weather the storm," he said. "It led us to try and restructure, but we didn't expect our cash flow to keep dwindling."

Rockaway filed for Chapter 11 bankruptcy protection in April. A bankruptcy court judge agreed in July to sell Rockaway's assets to Sleepy's and Hudson Capital Partners.

Rockaway closed all 144 of its stores on the East Coast. Sleepy's is in the process of moving into 66 of those stores. Inventory at 64 Rockaway stores was liquidated, raising $15.5 million, according to A.R. Williams, chief financial officer of Hudson Capital Partners.

stephanie.newton@baltsun.com

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