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Simmons management will stay

David Perry -- Furniture Today, November 23, 2003

Atlanta — The outline of a blockbuster transaction for the sale of Simmons Co. confirms what Simmons CEO Charlie Eitel said when he announced the possible sale of the company a few months ago.

Simmons management would remain in place, Eitel said then, whether the company is sold or not. And the deal with Thomas H. Lee Partners announced last week does leave Simmons' management team in place.

Eitel, 54, who joined the company in January 2000, will remain chairman and chief executive officer. Also staying will be key managers, including Bob Hellyer, president; Bill Creekmuir, executive vice president and chief financial officer; and Rhonda Rousch, executive vice president of human resources.

Senior vice presidents Don Hofmann in marketing, Kevin Damewood in sales, Al Podratsky in procurement, Bob Carstens in operations and Kristen McGuffey in legal also will remain.

Officials with Thomas H. Lee Partners and Fenway Partners, which will retain a 10% stake in the company, praised Eitel's team for producing outstanding results.

"There is no way the company would have sold for $1.1 billion if management didn't stay in place," Eitel said. "A big part of what they are buying is management."

He added, "We have created a company where people like what they do and they like the company. ... I love this industry and I'm still learning every day."

Why Simmons is selling for $1.1 billion

A strong management team. Chairman Charlie Eitel and his top managers have a record of increasing sales and profits, and the team will remain in place.
Strong results. Sales for the nine months ended Sept. 27 were up 11.5% from a year earlier, while net income jumped 82.4%. Simmons clearly has momentum.
An emphasis on better bedding. The company's "Better Sleep Through Science" philosophy has driven its average unit selling prices far above industry norms — and the company's growth trend has been consistent for several years.
Product innovation. In a gutsy move, the company introduced a one-sided mattress in 2000. That design took off in the market and now accounts for about half of all bedding sales in the industry. A new cable coil design in the new Beautyrest line will further boost sales next year, company officials say. Other recent product initiatives include a new visco-elastic bedding line and an ultra high-end line, Windsor Bedding.

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