Charlie Eitel of Simmons Announces Changes in Industry Letter:

Furniture World News

"Simmons Over the last several weeks I have spent the majority of my time meeting, listening and speaking with many of you, our valued customers about the challenges our industry is facing. Just as you are developing your own plans for the future, so are we at The Simmons Company. We believe there is a new opportunity to work more closely with you as partners, creating an environment in which you, Simmons and the consumers who buy our products all benefit. "In response to what we have learned, we are making some significant adjustments in our organizational structure to streamline our business practices. These changes will enhance your satisfaction with us by establishing Simmons as a company known for three core competencies: - customer intimacy - product design innovation - manufacturing quality and service "To accomplish these important initiatives we have created a new organizational structure and made some major internal changes. Effective immediately, we have created a new Senior Leadership Team comprised of myself and industry professionals in the areas of manufacturing, sales, marketing, finance and human resources. Each member of our new executive team will be intimately involved with our customers, ensuring that we meet your business needs. Peter Brink has joined Simmons in the newly created position of Executive Vice President and Chief Operations Officer. Peter will oversee all manufacturing operations, manufacturing services, research and development, engineering, quality assurance and distribution. His focus will be on developing a consistent manufacturing process and output that fulfills customer expectations for the best bedding products in the industry. This will ensure that our sales representatives can focus their energies on growing your business, not internal operations issues. Bob Hellyer, who has recently been promoted to executive vice president, Sales, will set the strategic selling direction for Simmons regional and national sales team, and lead the charge to establish strong dealer relations as "job one' among the sales force. As part of our reorganization, we will be eliminating the Divisional President and Plant General Manager positions and replacing them with three Divisional Vice Presidents of Sales and 18 newly created Regional Vice Presidents of Sales, all from within our organization. Bob is a fourth generation veteran of the bedding industry and the former General Manager and Vice President of Sales at Simmons Janesville Plant, which won Simmons quality award for the last six years. Don Hofmann has been promoted to senior vice president, Marketing. Don will ensure that Simmons continues to be recognized in the eyes of consumers as the leader in better sleep, His role will encompass brand management, new product development and communication of Simmons message to our customer and the consumer. This includes ensuring the consistency of applying Simmons Better Sleep Through Science philosophy throughout all product development and marketing initiatives. He will also continue to spearhead the company's advertising initiatives. Ken Barton has been elevated to senior vice president, Human Resources. Ken will lead the initiative to continue building a company of great people, recognizing that people are our most important product. With over 20 years experience at Simmons, Ken will ensure the company retains and develops the best talent in the industry. Ken will also continue to serve as the company's lead on all labor negotiations. Mike Rakauskas, senior vice president, strategic planning, will provide the strategic analysis to ensure that the company's output remains focused on the needs of our customers and the consumer. Mike, who has extensive experience in the bedding industry, will also head up Simmons strategic acquisition team. A new executive vice president and chief financial officer will be hired in the very near future, In the interim, Roger Franklin, a Simmons veteran and the company treasurer, has agreed to serve as interim chief financial officer. With our new leadership team in place, we are uniquely positioned to provide you with an unparalleled level of service. As I have expressed to some of you during the last few weeks, we are going to be totally upfront with you on all issues relative to our partnership, to assure that you increase your profitability on our product line and that we grow our market share. Many of you have asked how we will do that. It's not complicated. Here is the plan: We are committed to deign and develop products that deliver better sleep. More than 70% of consumers are desperately in need of a better nights sleep and 66% are willing to buy a new mattress that delivers better sleep. Fulfilling that unmet consumer need can change your business. Beautyrest and BackCare do that, and we will continue doing it by being the innovative leader in new product design. We will create an organization where our dealers are excited and find it easy to work with us. By streamlining our organizational structure, the entire Simmons Company is focused on serving your needs. In addition, our sales reps are now clearly focused on selling and improving dealer relationships and profitability. We will be obsessed with producing quality products. We will eliminate waste and inefficiency, creating product consistency and integrity across the board at every plant. Our product quality and service will be second to none. "In order to bring clarity to the above mentioned changes, I have attached an updated organizational chart (including contacts) with specific focus on sales and operations at the plant level. I look forward to sharing our joint success, working as partners to provide consumers with better lives through better sleep."