The Sealy wars erupt: Sealy Inc., Ohio-Sealy duke it out over sales territory, pricing
BY JULIE A. PALM
If there was a single mattress manufacturer that dominated headlines during the era, it was Sealy.
The period began with Chicago-based mattress manufacturer Sealy Inc. in the midst of a long-argued suit brought by the U.S. government, which charged that the company had violated Section 1 of the Sherman Act “by conspiring with its licensees to fix prices at which retail customers of the licensees might resell bedding products bearing the Sealy name, and to allocate mutually exclusive territories among such manufacturer-licensees.”
The suit was of such interest to the entire industry that when the court issued its 6-1 ruling finding that the way Sealy divided territories did restrain trade, Bedding magazine article printed both the majority and dissenting opinions in full.
But the Supreme Court’s decision would not be the end of Sealy’s trials—or tribulations. The 1970s and 1980s were a time of fierce competition and bitter litigation between Sealy Inc. and its largest licensee, Ohio-Sealy Mattress Manufacturing Co.
Ohio-Sealy (originally Ohio Mattress and in the Wuliger family since 1907) launched a massive expansion in the late 1950s under the direction of Ernest Wuliger, the founder’s grandson. By 1970, the company had gone public and, according to an August 1970 Bedding article, “One of Ohio-Sealy’s stated corporate goals is additional acquisitions of related businesses, particularly other Sealy licensees.”
Sealy Inc., led by Howard Haas, had other ideas, strongly contesting Ohio-Sealy’s intended purchases. The news pages of Bedding during the period are filled with stories of the back-and-forth purchasing battles between the two companies as they each sought to buy up additional Sealy licensees—and the court fights that followed as they sued and counter-sued each other.
When Ohio-Sealy acquired Stearns & Foster Co. in December 1983, shareholders voted to change the larger company’s name to Ohio Mattress Co. Three years later, a $77 million judgment gave the company the leverage to buy seven more licensees in quick succession and thus control over the vast majority of Sealy Inc. stock, according to a February 1987 Bedding article. By October 1987, Ohio Mattress completed the “roll-up.”
So, with that, the “Sealy wars” came to a rather abrupt end. To the victor went the spoils: In March 1989, Ohio Mattress was sold to outside investors for a figure unprecedented in the mattress industry—$980 million. ✦
Read all seven parts of this month’s special ISPA 1966-1990 centennial section:
Part I – Main feature: ‘The challenge of change’
Part II – New directions for mattress industry public relations
Part III – Uniform Monday Holiday Act brings sales, promotional opportunities
Part IV – The industry enters the computer age
Part V – The Sealy wars erupt: Sealy Inc., Ohio-Sealy duke it out
Part VI – Out with the old: Industry works to keep used mattresses out of circulation
Part VII – Product trends of the time: Waterbeds make waves
View this special section as it appears in the print magazine: BedTimes’ August digital edition.