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    Dial-a-Mattress, in Bankruptcy, Plans Sale to a Rival

    March 25, 2009 2 min read

    1800 Mattress Call, Click, or Come in logo from 2009.

    Dial-a-Mattress Operating Corporation, known for pioneering bedding telesales with its catchy 1-800-Mattress jingles, is now under bankruptcy protection and is negotiating a sale with its competitor, Sleepy’s.

    Owned by Napoleon Barragan, the firm faced a sharp decline in sales and tighter conditions from suppliers, as per legal filings.

    Recently, creditors demanded repayment of $1.7 million through an involuntary Chapter 7 bankruptcy filing against Dial-a-Mattress. The company aims to shift this to a Chapter 11 reorganization plan.

    Sleepy’s, in a recent announcement, agreed to provide debtor-in-possession financing to Dial-a-Mattress during its operational restructuring, pending court approval.

    Mr. Barragan expressed that aligning with Sleepy’s was the optimal route for refinancing and advancing their business strategy, particularly focusing on strengthening their traditional telephonic and online sales channels.

    A representative disclosed that the company’s revenue plummeted from $170 million to under $100 million over two years.

    In its bankruptcy documents, Dial-a-Mattress reported having $9.37 million in assets against $11.14 million in debts, leading to the closure of 15 out of 49 outlets and showrooms.

    Major unsecured creditors include leading mattress manufacturers like Sealy, Serta, Simmons, and Tempur-Pedic.

    Sleepy’s, a privately held firm headquartered in Bethpage, New York, operates around 700 stores across 11 states.

    Dial-a-Mattress, established in 1976 by Mr. Barragan, was inspired by a similar business model from Dial-a-Steak, a meat delivery service. It's noteworthy that the bankruptcy does not affect Dial-a-Mattress franchisees in New England, Connecticut, Philadelphia, central and southern New Jersey, and Florida, as they are independently operated entities.

    This filing follows a trend of bankruptcies within the bedding industry, including Mattress Discounters, Mattress Gallery, and Foamex International, reflecting consumer hesitancy in high-value purchases amid economic downturns.

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