On Jan. 31, mattress major Tempur Sealy International Inc., headquartered in Lexington, Kentucky, acquired an 80% ownership stake in Sherwood Bedding from troubled South African retail group Steinhoff International Holdings NV. The cash purchase price was approximately $40 million. Steinhoff bought Sherwood in 2017, after acquiring sleep shop chain Mattress Firm in 2016. In late 2017, Johannesburg-based Steinhoff was hit by a massive accounting scandal from which it has yet to recover.
The Ellman family, which founded Orlando, Florida-based Sherwood, is expected to retain its remaining 20% stake in the company and to continue to operate the manufacturer as an independent business within Tempur Sealy.
According to a news release, no personnel reductions are expected. Sherwood describes itself as a low-cost, high-value producer of private-label and contract bedding. It has estimated annual wholesale revenues of more than $150 million and expects to fund its own future growth, the release said.
“Over the past nine years, Sherwood Bedding has grown to become one of the most respected bedding producers in the industry,” said Scott Thompson, Tempur Sealy chair and chief executive officer. “Sherwood Bedding’s flexible and efficient operating model, focused primarily on value and high-velocity price points, complements Tempur Sealy’s iconic brands, powerful distribution model and supply chain. Together, we believe we can build on existing relationships to deliver more compelling products, branded and nonbranded, than either business could on its own.”
Neil Ellman, Sherwood co-president, added: “With Tempur Sealy being the dominant player in the U.S. bedding industry, we believe we have the perfect partner to acquire market share in the private-label sector. The complementary knowledge and market fit of the companies, as well as the ability to improve on our low-cost structure, deliver a unique opportunity and provide us with a sustainable competitive advantage.”