Simmons Company began as one of many projects of Wisconsin businessman Zalmon Simmons He entered the bedding industry by accident in 1870, after purchasing a cheesebox factory. A gentleman sold Simmons a patent for a woven wire bedspring. This unknown inventor was not the first person to patent a bedspring. At least one earlier patent was held by a New York inventor. But the technology was expensive, and mattresses in the 1870s were by and large stuffed with horsehair or cotton. Simmons went to work on the bedspring idea, and managed to bring down the cost of manufacturing each spring to around 80 cents. Nevertheless, the idea seemed before its time.
The company incorporated as Simmons Co. in 1915. The company was brought to national prominence within a few short years by making the innerspring mattress something middle-class consumers could afford. In 1900 a Canadian inventor patented a mattress with springs held within individual cloth pockets. His "Marshall ventilated mattress" was made by hand, and sold to luxury hotels.
Simmons moved its company headquarters to New York in 1919, trying to make itself a national name. The company acquired a string of mattress makers at the same time. It bought a firm in Atlanta, another in San Francisco, one in Montreal, and the Newark Spring Mattress Company in Newark, New Jersey. The mattresses were still made by hand, often stuffed with the cuttings left over from tailor's shops and other cheap material. Simmons drafted one of the machinists from his original Kenosha factory to study the feasibility of making a spring mattress cheaply by machine. The machinist worked for three years, and finally revealed something similar to the Marshall ventilated mattress, with springs held inside individual cloth pockets. The equipment to make it was called the Beautyrest Pocket Machine, and the resulting mattress was the Beautyrest.
Simmons set a standard retail price for its new product, $39.50,nearly twice what consumers were used to paying for a mattress. In its first year, the Beautyrest mattress brought in $3 million.
In 1929. Simmons's stock had been flying high, at close to $200 at the height of 1929. By 1932, it was almost worthless. Simmons Co. became profitable again by 1935, and then entered a period of steadily growing sales.
In 1958 Simmons created another landmark in mattress history, the Beautyrest Supersize. The Supersize was the first queen- or king-size mattress widely distributed in the United States. By this time, the company was a national leader in bedding products, well-known and profitable.
Simmons had a profit of over $8 million in 1968, and very little debt. By 1970, Simmons had also diversified into the casket industry, owning one casket manufacturer and one manufacturer of metal casket linings. By 1970 Simmons had also diversified abroad, running foreign subsidiaries to make bedding in Canada, Mexico, Venezuela, Argentina, England, France, and elsewhere.
The company had grown rapidly in the 1960s, and by 1970 it had become a multinational conglomerate in the mid-ranks of the Fortune 500. Much of the firm's diversification had been orchestrated by Grant Simmons, Jr., great-grandson of founder Zalmon. In 1972 there was a management restructuring, which coincided with moving the company headquarters out of New York to Atlanta, Georgia. Earnings began falling in 1973, falling off 50 percent between that year and 1977. Sales for 1977 were just over $468 million, showing almost no increase over 1973. Perhaps most ominous, the company lost market share. It had been the number one bedding maker in 1974, with a market share of 21 percent. Its next nearest competitor, Sealy, had only an 11 percent share. But by 1978, Sealy had pulled ahead. Simmons's bedding operations began losing money in 1976, and its only profitable units were its international divisions and non-bedding subsidiaries. In 1979 the company was acquired by Gulf & Western, a large conglomerate which had been buying up Simmons stock since 1976. Simmons became a wholly owned subsidiary of that company.
In 1985 Gulf & Western sold Simmons Co. to Wickes. Wickes held onto Simmons for only one year. In 1986, a management group and the investment firm Wesray Capital raised $120 million for a leveraged buyout of Simmons. Seventeen Wesray partners, plus 18 Simmons executives, borrowed almost the entire purchase price to secure the company. Over the next two years, the new management sold off pieces of Simmons, until almost all the debt was repaid.
In 1989, the management group decided to try something Wesray had done successfully before with other companies it had taken over. This was to sell Simmons to its employees through an employee stock ownership plan, or ESOP. This was a seriously flawed deal that soon saw Simmons at the brink of bankruptcy and all the involved parties battling it out in court. Wesray engineered the sale to the ESOP, helping the employee entity borrow the purchase price, $241 million, just over twice the amount Wesray and partners had paid for the company in 1986. In March 1991 Merrill Lynch Capital Partners offered to buy 60 percent of the company for the astonishingly low price of $32 million. Employees were left with an approximately 30 percent share in the company. Simmons employees filed a class-action suit against Wesray and Simmons managers, which eventually settled out of court with a payment of about $15 million to the ESOP.
In 1996 Simmons came out with an evocative television ad, which showed a bowling ball dropped on a Beautyrest mattress and not knocking down ten bowling pins standing on it. Beautyrest sales increased by over 50 percent within a month of the ad's debut. In March 1996, Merrill Lynch sold its stake in Simmons to a Bahrain-based investment group, Investcorp. The ESOP also sold part of its stake in the company, leaving it with 15 percent, and Investcorp with 85 percent. The investment group paid $250 million for its share of Simmons, and assumed some of the company's debt. By 1997, Simmons had sales of over $550 million, with a profit of about $50 million.
In 1998 when a private investment firm, Fenway Partners, bought out most of Investcorp's share. The New York-based Fenway paid about $500 million for roughly 75 percent of the company. Simmons came up with a new brand for the millennium, the Beautyrest 2000 NoFlip mattressSimmons began licensing its name to a textile manufacturer in 2001 to make sheets, comforters, accessories, and window treatments under the Beautyrest, BackCare, and other Simmons brand names. Sales for 2000 were reported at over $727 million by 2007 they were at$1,126.800,000
2009 Ares Management and the Ontario Teachers Pension Plan, which also are the owners
of fellow bedding major Serta purchase the company
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