Fendrich leads Simmons to new era
By David Perry -- Furniture Today, May 10, 2010
ATLANTA —
It was 507 days of challenges, a test of his leadership abilities.
And when that test finally came to an end, on a rainy night here in January, his company emerged from Chapter 11 protection with what in his view were strong new owners and a bright future. Gone at last were the clouds of uncertainty.
Steve Fendrich, president and chief operating officer of Simmons, celebrated the beginning of a new era at Simmons during a quiet dinner with friends at a downtown Atlanta restaurant. His ever-present Blackberry hummed with messages of congratulations as the evening progressed. The deal was on track.
At 11:59 that night, Simmons officially gained new owners, Ares Management and the Ontario Teachers' Pension Plan, who also own bedding major Serta. That ended a 507-day process that began when Simmons tripped a debt covenant in the fall of 2008, a development that ultimately led to a financial restructuring of the company.
There were plenty of twists and turns along the way, including a bizarre and unsuccessful last-minute campaign mounted in China to seek Chinese bidders for the company. Through it all, Fendrich remained cool under fire. That calm approach to business served him well.
“I'm a very objective person,” he reflected in a recent interview, several months into the company's new ownership. “My first reaction is to ask questions. I want to know what the real facts are and how we will deal with them. If you know what the obstacles are, you can do something about them.”
His fact-based management style was critical in steering Simmons through months of uncertainty, months when rumors swirled around the company.
“The uncertainty had been hanging over our heads,” Fendrich admitted. “That was one of the things we had to deal with. It was nothing ominous, but it was the sheer fact of the uncertainty.”
He dealt with that, he said, by focusing on communicating clearly with the company's employees and its customers, and by understanding of the value of committed employees. “They really make the difference,” he said, and he worked hard to make them fully engaged partners in growing the business.
While he was bound by confidentiality agreements that prevented him from talking about suitors, he was careful to keep everyone informed of the steps that Simmons was taking as its restructuring moved ahead. “There was a lot of 'trust me' in that process,” he said.
Fendrich, 48, had a quarter century of experience in the mattress business behind him, but the situation he faced was unique. Longtime bedding observers said they couldn't recall any comparable challenge that has faced a bedding leader.
Fendrich said Simmons came through the process in good shape.
“I don't believe we lost any customers due to the restructuring,” he said. He credited that to “a great leadership team” that remained focused on the fundamentals of the business — and to the support of key Simmons partners. “I am extremely grateful to the people of Simmons for their focus and dedication, as well as to our customers and suppliers for their tremendous support throughout this process,” he said.
The “new beginning” at Simmons, which its owners say will be run separately from Serta, augurs well for the future, Fendrich said. He expects aggressive investments in the Simmons brand and says the company will remain committed to innovation and excellence.
The new Simmons Beauty-rest line, launched last month in Las Vegas, will be a key driver of business this year, Fendrich said. He predicts that Simmons will gain market share in 2010.
The battle for mattress business is one that Fendrich knows well. He began selling mattresses at American Bed in Chicago in 1983. A graduate of the University of South Dakota with a degree in accounting, he said the traditional Midwestern values he learned at an early age — integrity, honor and truthfulness — served him well in the world of business and in the mattress industry.
His entrepreneurial drive led him and two partners, Paul Stork and Harry Roberts, to establish a new kind of mattress retailer in Houston. “We saw an opportunity in this industry to change the way mattresses were sold in Houston,” Fendrich said. “At that time, the mattress shopping experience was not a pleasant one.”
The new retailer, Mattress Firm, became one of the brightest success stories in the industry and now ranks among the nation's largest and most professionally run bedding specialty chains. Fendrich fondly recalls the days he spent building that company. “That was a fun, hard-working environment,” he said.
After selling the business, Fendrich moved on to a different kind of challenge: Running an established sleep shop operator. In 2002 he was named president and CEO of Sleep Country USA on the West Coast. There the challenge was learning how to engage and motivate employees that he had not spent years working with. Leadership guru Larry Wilson helped him, he said.
In August of 2005 Fendrich moved to the wholesale side of the business when Simmons CEO Charlie Eitel picked him to be executive vice president of sales. “Charlie wanted to bring in a retail perspective,” Fendrich said.
His rise at Simmons was a rapid one. In January of 2008 he was named president, and became the top Simmons executive later that year when Eitel stepped down from day-to-day management. That fall, Simmons found itself in default on a debt covenant, triggering the process that led to the sale of the company.
Now that 507-day roller coaster is behind him, and Fendrich is excited about his plans to grow the business this year.
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