Lockport Mattress Co. has joined forces with a Wisconsin-based "factory direct" mattress seller as it seeks financial stability and future expansion.
Lockport Mattress, which recently filed for Chapter 11 bankruptcy protection and shuttered two of its six stores, has sold a majority stake in its business to Verlo Mattress Factory Stores, of Whitewater, Wis.
Company president Randall Pegan said the new partnership will give Lockport Mattress a bright future that will include a range of new products and potential for growth.
"We'll still have the Lockport Mattress name. We'll still make mattresses here and maintain our factory and store staff," Pegan said. "And we'll gain the strengths of being associated with a much larger, successful company that shares our standards of quality and integrity."
Founded in 1994, Lockport Mattress, which manufactures its own brand mattresses at 6412 South Transit Road in Lockport, ran into financial difficulty last summer through a sister company, Sleepco. Formed in March 2005, Sleepco briefly sold Serta International brand mattresses through a trio of local Serta stores in Hamburg, Lancaster and Amherst.
The three Serta stores were shuttered last September in the face of tough competition from Rosa's Home Stores, which also started to offer Serta products.
"What we thought was an exclusive contract to sell Serta mattresses turned out not to be so exclusive," Pegan said. "We just couldn't compete and ended up with huge overhead costs from the Sleepco expansion which impacted Lockport Mattress."
In its March 13 bankruptcy filing, Lockport Mattress detailed liabilities totaling $964,000.
Pegan said the new partnership with Verlo, which controls 70 franchise stores in nine states, came out of a friendship he struck with Verlo President David Young in 1995. After meeting at a mattress industry conference, the two kept in touch and more than once over the years Young suggested a sale to Verlo.
"They have been in an expansion mode and we would have been a way for them to enter New York state. But we wanted to stay Lockport Mattress and not have to change our name and become a franchise of theirs," Pegan said.
Facing the squeeze from Sleepco's failure and increasing operational costs related to rising mattress materials prices, the Lockport chief called Young and a partnership was born.
"In a way this was a very easy decision. These are two companies that are very similar in how we do business. We both produce two-sided, hand-crafted mattresses of very high quality and that's not going to change," he said.
The tie to Verlo will also bring new products to area Lockport Mattress stores, including futon mattresses and bed frames, pillows, sheets and mattress covers. The Lockport plant is also expected to begin making futons.
Young confirmed the new relationship with Lockport Mattress which gives Vymac Entities, a Verlo subsidiary, a 51 percent stake in the local business.
"We see this as an investment in Lockport Mattress that will bring a lot of synergies to what we do," Young said. "We're really excited about helping them get back on their feet."
He noted Lockport's strong brand recognition and market share as positives that the new partnership will build on.
Pegan said his immediate goal is to stabilize the local operation and get back to a six-store chain. Long-term, he hopes the partnership will lead to expansion into Rochester, Syracuse and Albany.
Lockport Mattress currently operates showrooms in Lockport, Amherst, Hamburg and Niagara Falls. It has closed its Buffalo and Cheektowaga locations as part of its reorganization effort.