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Spring Air's sudden closing triggers mad scramble for business
Spring Air’s unexpected shutdown triggered a cell phone feeding frenzy as mattress manufacturers, retailers and suppliers scrambled to replace the nearly $200 million in wholesale bedding sales that were taken out of the market overnight.
As soon as word began to leak out Monday and Tuesday that Spring Air’s nine corporate factories had closed, phone minutes were gobbled up faster than Ms. Pac-Man as key players in all three segments of the business tried to figure out what was happening.
Retailers needed shipments, competing manufacturers worked overtime to grab additional market share, and suppliers suddenly had to adjust production levels while realizing they will receive little, if any of the money Spring Air owes them.
And it hasn’t helped that Spring Air executives disappeared shortly after written notices about the closings were posted at each factory entrance. They didn’t even have the courtesy to tell their employees in person.
About the only insight into the reasons for the shutdown were contained in a letter sent to the Ohio Department of Job and Family Services that notified the agency of the factory closing in Columbus.
The letter says, in part, that Spring Air “very recently has become unable to obtain the financing and increased revenue it has sought.”
It goes on to say that the investment firm American Capital, Spring Air’s principal owner, pulled the plug on additional financing on April 28 and the mattress producer was unable to obtain financing from other sources.
The letter also says the company has filed for bankruptcy protection, but as of Friday afternoon, my extensive search of various U.S. Bankruptcy Court data bases turned up nothing related to Spring Air or Consolidated Bedding, the former Spring Air licensee who led a buyout of all but three other licensees in June 2007.
(The three licensees who weren’t part of the buyout, by the way, are operating their factories as usual since they have the rights to use Spring Air’s name, patents and trademarks regardless of what happens to the licensor.)
Aside from Furniture/Today’s coverage, including this story about Leggett & Platt increasing its bad debt reserve by $8.5 million, media outlets in cities where Spring Air had corporate factories also have reported on it.