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May Earnest Wuliger, chairman of the world's largest bedding Firm, improve earnings and boost market share? http://bestfutonmattresses.com

BY BOB ANKOSKO It's been one year as the Ohio Mattress Company finished the final stage of its massive Sealy buyout and, finally, the dust is settling.

Chairman Ernest Wuliger along with his executive staff in Cleveland Have spent most of the previous 12 to 16 months sorting through their new $600 million business, shaping operations and personnel as they went along.

While It's Been a grueling period for getting the home in Purchase, there was consolation in that Ohio Mattress was free at last of their courts and constraints of a licensing agreement. Fifteen years of legal wrangling was over, and Ohio Mattress -- now the world's biggest manufacturer of bedding products -- obtained what it needed.

The 67-year-old Wuliger, who's mastered Ohio Mattress having an Iron hand for 25 years, today faces the toughest challenge of his career: To preserve the leading bedding products' market place and at the exact same time satisfy stockholders by boosting sales and earnings.

Competitors contend that Sealy's position has weakened in the Last year -- particularly in the furniture shop station. They say internal confusion and efforts to boost pricing have created a chance for opponents to encroach on Sealy turf.

Still, Wuliger is "happy" with all the progress which has Been made in melding the operations of eight Sealy licensees into Ohio Mattress. Especially, he points to 1987 earnings of $1.12 percent share compared with the project $1.10.

Wall Street, also, is happy with Ohio Mattress's strides. In a Shining report ready for Salomon Brothers Inc., analyst Harvey Katz wrote: "Ohio Mattress has been fortunate for a firm making a size-doubling acquisition." Regardless of the size of the Sealy acquisitions, Katz noted that the transition by a $297 million firm to one with $598 million in annual sales was comparatively easy.

Katz pointed out from the report that average operating profits of The acquired companies were better compared to the ones of Ohio Mattress -- 14.7 percent versus 8.8 percent -- that provided an instant financial boost. "The businesses acquired were virtually identical to Ohio's Mattress's core business and, thus, reduced any learning curve problems,' he added.

The refrain of the Salomon Brothers report was that Ohio Mattress is a rewarding, well-run company, poised for long-term results. Katz observed: 'Considering that the visibility of future earnings, its strong cash flow and the stable nature of its businesses, we feel that the inventory should sell at a market multiple at the least"

Among Sealy's competitions even admitted tht he was amazed by Ohio's accomplishments during the transitional season: "Sealy has done a better job which I anticipated. I would have thought they'd have been more bogged down with all the problems of a large business. But they still have been able to talk."

David November, executive vice president of Sealy Mattress Co.. Of New Jersey, the only Sealy licensee that didn't sell out to Ohio Mattress, added to the accolades: "Ownership of Sealy by the Ohio Mattress Co. was a plus for the Sealy organization because there's currently 1 leadership that's focused. The consumer and retailer do noit get mixed signals any more. As a licensee, our connection with (Ohio Mattress) is the best it has ever been."

Unaffected by praise, Wuliger admits that the job of Incorporating Sealy to Ohio Mattress is not finished. Nevertheless, he's confident. "As time progresses, we'll get market share," he explained. And at the 1987 annual report, he wrote: "Our lengthy lawsuit has come to a finish, which makes it feasible to devote all of our energies to the mattress industry. We are in a position to achieve additional sales and earnings gains in 1988."

The Core of Wuliger's drive for higher sales and earnings -- And he admits that profits will be small this year -- will be an emphasis on gain. Improved margins, '' he acknowledges, would be achieved through a combination of price and efficiency.

When Ohio took over Sealy annually past, Wuliger identified five Segments "as major areas to boost profitability." Heading the list was improving and pricing margins. This effort is evident from the upscaling of Sealy's new Posturepedic line, which recently started shipping to dealers.

Analysts also note that Wuliger's gain drive bodes well for Ohio's Stearns & Foster brand. With a 4 percent market share, the high-end brand has room to grow. Besides, the marketplace itself is gravitating toward premium bedding.

Reducing delivery costs by moving business to the plant closest To a given marketplace was second on Wuliger's list. The majority of those savings are realized, '' he said.

Next was personnel. Changes have been made at the former Sealy Headquarters in Chicago, today a sales and support office, and at the prior licensee locations. "We've made considerable strides in that. We've not finished, but finally this will throw off further profits as we combine," Wuliger said.

"The fourth (place was having our very own supply of innerspring Units," he said. Together with the buyout of seven Sealy licensees in December 1986 came three crops.

Plant consolidation is Wuliger's closing profit-enhancing goal. "We have done a number of those and we would do them later on where they make sense," he said.

Last year, consolidation action included moving a Streans & Foster manufacturing performance in San Antonio to the Sealy mill in Brenham, Texas. "That is the only factory in the system that creates both Sealy and Stearns & Foster," Wuliger noted.

"We're currently building a new facility in Millville, N.J., and as soon as it's complete, we will most likely have transferred the Sealy-Bridgeport centre there," he said. "and we may at the time combine the foam plant in Philadelphia with it"

Unlike what some industry observers think, Wuliger Stated Consolidating Stearns & Foster production with Sealy is "not a big factor" in the grande scheme of things. "I think in which it becomes evident that will make sense, you look at it and proceed with it. We are not going to consolidate crops for consolidation's sake."

Ohio Mattress's profit mandate, along with an end to price Rivalry among Sealy factories, has set some retailers on edge. But, others see no real changes since Ohio Mattress occurred over.

The proprietor of one Midwest speciality series, Who's upset with Sealy's new pricing posture, said, "I believe Sealy is struggling to get people not to market low rates. But pricing -- at least in this market -- is still quite competitive.

"They are attempting to stabilize pricing and move it Upward," he said, "and that I hope they can. 1 thing I will tell you is, this has allowed smaller brands to move into Sealy's accounts."

1 industry observer, defended Sealy's margin-building strategy Of de-emphasizing low

"We're interested in selling any trader Who's interested In aggressively promoting any of our product line. We don't wish to sell dealers who want to use the brand name to market different products."

-- Ernest Wuliger, Ohio Mattress Co. price. Traders That Are not Dedicated to the brand are usually those who complain, '' he said. "The dedicated dealer is interested in creating that company and is pleased with Sealy's position."

Virtually all of Sealy's competitions refused to proceed on the record About the brand that regulates one-quarter of the marketplace. Yet, half of eight bedding executives interviewed for this article did state chances have opened for them in last calendar year.

Some contend these are the results of internal confusion that Has come across in the marketplace for a lack of direction. Other people claim they've been in a position to invade Sealy land, because Ohio Mattress pricing isn't quite as aggressive as it had been during the days when licensees undercut one another.

"Sealy has had any problems since they left the conversion From licensor into Ohio Mattress," said one competitor. "They have come out with healthy cost increases and we make the most of that. Their greatest disadvantage is that they are still in some disarray. Personnel is 1 area of disarray. It will take time to pull it into a cohesive, well-functioning organization."

In reaction to rumblings about price increases, Steve Kneeland, President of Sealy, said: "In some cases there could be some dramatic changes (because) we did not say 'all of the previous deals are away' when we purchased the (Sealy) factories. So it depends upon who (the merchants) were buying from. Part of this (speak of high prices) is the merger material working through.

"Our normal growth -- from averages across the country -- Is 5 percent on some items," Kneeland said. " (But) we are a completely new line. There isn't a similar thing -- the line was re-merchandised. Most of what you're hearing is us trying to get our price line."

As for market share, yet another competitor noted that Sealy has held ground. "However, some people believe that they're not as flexible as they were. It was if a buyer could not get the price from one Sealy mill, then he'd go to another. Those days are gone."

Still another competitor argued that some of the direction Changes Ohio Mattress made in the prior licensee plants has damaged entrepreneurial spirit. "Their (Sealy's) position has substantially weakened from where it had been. You don't have the business of entrepreneurs out there from the field anymore. They're (Ohio Mattress more concerned with filling positions and making personnel changes. http://bestfutonmattresses.com/futon-mattress-twin-size/

"They are slipping, and we are benefiting from that," he continued. "We benefit because they're in a state of confusion. They're more concerned about inner; issues than about their customers."

One Sealy insider -- a veteran of 28 years -- countered that Opportunities which might have arose during Ohio's transition season are temporary. "Any window of opportunity that is there exists merely because there were modifications of people. Any time you do this it creates a disruption in the industry. But it is a really short-lived one"

Katz of Salomon Brothers said personnel seem to have had small Influence on operations. "I feel that the Ohio Mattress people were aware of the during the time of the acquisitions. That is part of the reason that they set up an incentive system early on that rewards local performance. And I think to a large eaxtent the management of a number of the acquired firms already were professional type managers."

A number of bedding manufacturers and retailers singled out furniture Shops as one place where Sealy runs the best danger of dropping ground. As stated by the Salomon Brothers report, 48 percent of Sealy's products were marketed through furniture shops, sleep shops and other speciality stores in 1986 -- a figure which Wuliger confirmed.

One competitor offered this evaluation: "I look at Sealy Now such as I look at GE and RCA. They are mass entrepreneurs in beddng and their goal is to increase market share through mass distribution. In my opinion that will suffocate the furniture merchant's abilitly to get any individuality.

"They simply will not be workable as a source that furniture Stores and department stores will need down the road," he continued. "They will promote mass merchandisers or anybody to gain market share. Retailers who need some sovereignty will turn into other lines."

Another competitor spoke of the firm's selling philosophy. "Sealy has an avowed policy of promoting everybody. Particular retailers are extremely miserable with Sealy. They're more prone to move with brands that are more selectively distributed and provide a more profitable lineup."

However, "selling everyone" is not a true philosophy, According to Wuliger. He confessed that Sealy is broadly dispersed, but added, "We are considering selling any dealer who's interested in aggressively promoting any of the product line. We do not wish to market dealers who wish to use the brand name to sell other products." Wulgier added he does not observe the mix of chalnnels that now sell Sealy altering.

The bedding purchaser to get a $50 million furniture string that Lately dropped Sealy had this to say about the brand: "We fell Sealy I guess about four or five months ago. It was due to a combination of a lot of things, including cost and such extras as advertising.

"Sealy became aggressive in the transition Interval," the purchaser continued. "and exhibited a lock of direction. That gave an advantage to a number of of the other brands that we were doing business with and invited us to do something else.

"You've got to know, there was an actual war going on (between Sealy Inc. and Ohio Mattress prior to the purchase) -- it had been who can kill who. But today they are looking more to get the bottom line up, and I can not blame them.

"For us, it was a matter of quantity versus gross. We wanted To keep most of the volume but also get gains up. Sealy is one of the more highly dispersed lines in our organization, which means you need to expect that you're going to attain a little less markup together."

Sealy accounted for over $1 million of the series's bedding Business, according to the buyer. The retailer has since improved its firm with Restonic and Spring Air to pick up the slack.

"In some cases there could be some dramatic changes (in Price because) we did not say 'all those previous prices are off' when we purchased the (Sealy) factories. So it depends upon who (the retailers) were buying from."

-- Steve Kneeland Sealy The waterbed sector is fighting the Present these days.

This past Year, earnings of Advanced Sleep Products -- that the Ohio Mattress Division that makes waterbeds and related furniture dropped5.5 million. And according to a report by Salomon Brothers Inc., "Ohio Mattress' waterbed segment continued to function at roughly break-even levels" in 1987.

Ohio Mattress isn't alone. In March, TrendWest filed for Chapter II protection, and one-time industry leader Classic Corp. shut the doors to its Carson, Cal. factory.

However, Sealy is moving ahead with plans to introduce a Waterbed after this year, according to Ron Trzcinski, president of Ohio Mattress, "We're committed to take action if we could do it correctly. When we have a program that is sensible for us and our clients, then we'll do it as quickly as possible."

As a part of its commitment to the flotation company, Ohio Mattress last year combined its Wavecrest and Monterey manufacturing operations at one cost-efficient 200,000-square-foot facility in Carson, Cal.

In the waterbed convention in February, Ron Lewis, president of Advanced Sleep Products, stated product information and a promotion plan for a waterbed posture the Sealy title were in the functions. "More significant than showing the item at a trade show is to make sure it is right," he explained. "We want to make sure its success for us and retailers."

Salomon Brothers stated in its title: "The Corporation's control On the Sealy and Stearns & Foster names today gives Ohio Mattress the chance to deliver quality brand-name recognition to the waterbed market as it matures and unit volumes decline."

Traditionally, the waterbed marketplace was fragmented and Lacked brand name recognition. That may change, however, as both Somma and Simmons U.S.A. launch national ad campaigns.

Somma will invest $2.1 million in consumer print advertising During 1988, based on Tom Hatch, executive vice president of sales and marketing. And next month, Simmon's will kick off its first national advertising program promoting waterbeds.

Asked about the downsides of taking Sealy into the waterbed Company, Trzcinski said, "The market does lack manufacturer name identification. But the issue is that there is a waterbed marketplace today. Sealy is your title in mattresses. If we can generate a waterbed that people thought would be a better value to the consumer, than why should not we share in that marketplace?

"The innerspring market has essentially been flat ever since I have been in the company and long before that," he explained. "So I really don't find any reason not to be in waterbeds. And I don't think that it's an uphill battle. If you had a excellent product together with the Sealy name on it you could sell it without any problem." https://medium.com/@colorpop1102/futon-mattress-queen-size-48f28e0ee7c6

Competitors disagree. They state the Sealy name is not a ticket to Guaranteed earnings in the waterbed arena. However, retailers and waterbed makers agree that Sealy's entrance into the market would heighten the credibility of the business and potentially increase consumer awareness.

Wil the entry of a top name in bed store an ailing Waterbed industry?

"Hell no," Trzcinski said. "The industryd must Have some base by itself. If waterbeds are in fact a viable product then, Sure, people would rather purchase a brand name. However, if we're saying, 'Should we Introduced a Sealy waterbed it is going to turn (the industry) from one degree To another' -- no way."