Sleepy's, private equity firm bid on Mattress Discounters

But court postpones auction until after storm passes

Larry Thomas -- Furniture Today, October 29, 2012

RICHMOND, Va. — Top 100 retailer Sleepy's Inc. and private equity firm Longroad Asset Management have emerged as the two qualified bidders for bedding retailer Mattress Discounters, but an auction scheduled for today has been postponed due to a hurricane that has shut down much of the eastern U.S.

The auction, as well as a U.S. Bankruptcy Court hearing here to approve the winning bid, have been put on hold until after the storm passes.

Mattress Discounters, an 80-store retail chain, is not in bankruptcy, but parent company RoomStore Inc. is in the midst of Chapter 7 liquidation proceedings.

RoomStore owns 65% of the sleep shop chain and Mattress Discounters CEO Ray Bojanowski owns the remaining 35%.

An earlier agreement between Bojanowski and the trustee overseeing RoomStore's liquidation, gives the trustee the right to sell all of Mattress Discounters' equity for at least $10 million.

The initial bids of Sleepy's and Longroad weren't disclosed in the court filing, but neither was designated as the "stalking horse" bidder.

Sleepy's, based in Hicksville, N.Y., has more than 800 stores and was ranked ninth on Furniture/Today's most recent Top 100 Furniture Stores listing. The retailer had sales of $846 million in 2011, according to Furniture/Today estimates

Longroad Asset Management is a private equity firm based in Stamford, Conn. According to its website, the firm invests primarily in U.S. and Canadian companies with annual revenues of $300 million to $400 million.