Dormia Sleep Chain Files Chapter 11

June 18, 2008  by in UnCategorized   

By Home Furnishings Business in Bedding on June 2008 The 20-store Dormia specialty sleep chain filed for Chapter 11 in the U.S. Bankruptcy Court in Maryland, the company announced Wednesday.

In a press release, officials said the action enables the company to “determine strategic options” for the stores in nine states and its 50 employees. It has received debtor-in-possession financing from The CIT Group, which will enhance the nine-year-old chain’s liquidity, according tot he statement.

The release emphasized that Dormia’s wholesale mattress manufacturing business, Classic Sleep Products, is not affected by the move and continues to grow. “Like other specialty sleep manufacturers who entered the direct-to- consumer business over the past few years, we saw this as an opportunity to create another retail channel and to provide broad exposure for our brand,” said Classic Sleep Products President and CEO Mike Zippelli. “While some of the stores performed well over the years, we were never able to open enough locations to leverage the advertising and operational support in multiple markets.”

Zippelli said its wholesale business has seen a 15 percent in 2008 sales over the year before. “Classic is doing very well, and we did not want to negatively impact that business by supporting an unprofitable stores division,” Zippelli said.