Classic Sleep Products announced that it filed a Chapter 11 petition in U.S. Bankruptcy Court for the District of Maryland, seeking approval of the sale of assets of the company. With the approval of the Court, a new company, Classic Brands LLC, would own the assets and is backed with an infusion of $10 million in new financing. Classic’s long-time Chinese manufacturing partner will have an equity stake in the new company. The business plan creates a unique opportunity for Classic to solidify its position as the leading value mattress brand in the United States.
The company said there will be no disruption of service to its customers, vendors or suppliers. The company said it expected to exit the Chapter 11 process expeditiously.
Under the business plan, the current management team led by CEO Mike Zippelli, will increase its majority ownership stake in the business with funding provided by JMX Capital Partners and Classic’s senior lender, CIT Financial.
“We see this move as a very exciting opportunity to solidify Classic’s position as the leading value brand in the United States. This strong infusion of capital will strengthen our current business and position the company for dynamic future growth,” said Zippelli.
He explained that the Chapter 11 process was a necessary step for Classic to separate itself from its parent company, Dormia Inc., which had operated more than 30 stores until shortly after its Chapter 11 filing 18 months ago.
“We have worked closely with our Chinese supplier for many years. We are designing mattresses and they are building beds to the same specifications we use in our Jessup facility, but at pricing that delivers greater value to the consumer,” said Zippelli. “The cost differential gives us a unique strategic advantage by enabling us to include features at the under $1,500 price point at quality levels that are impossible to produce domestically.”
Classic Sleep Products sells its bedding products and accessories under the Dormia, Space Age and Natural Expressions brands and uses the finest materials from around the world including all-natural and high-performance covers, lamb’s wool, Talalay and Dunlop latex, and visco-elastic memory foam.
With its worldwide partnerships, the company is able to offer enhanced features on a wide range of value-driven products comprised of memory and latex foam that deliver unequalled comfort and value. Many of the premium products are manufactured domestically using handmade craftsmanship and custom embroidery.
Classic’s line of specialty foam products represents the fastest growing segment of the bedding market. They are designed to help customers get the maximum benefit out of each and every night’s sleep so they can lead more productive and healthy lives. For more information, visit www.dormia.com.