The Times on the Great Simmons Mattress Bustout
Here's Henry Hill, the Goodfella's wiseguy describing the scheme to Nick Pileggi back in 1987:
"A place has been in business say twenty, thirty years. It has a bank account. There's usually a loan officer who can come over and give you a loan for some improvements. Of course, if you can, you take the money and forget about the improvements, because you're expecting to bust the place out anyway.
"Also, if the place has a line of credit, as the new partner you can call up suppliers and have them send stuff over... ...No sooner are the deliveries made in one door, you move the stuff out another."
And here's former Simmons' president describing to Times reporter Julie Creswell the approach of the big money boys who flipped Simmons seven times in 20 years, paying themselves fat dividends as the bedding company was buried in debt:
"The mind-set was, since the money was practically free, why not leverage the company to the maximum?"
Here's the nut graph: "Every step along the way, the buyers put Simmons deeper into debt. The financiers borrowed more and more money to pay ever higher prices for the company, enabling each previous owner to cash out profitably."
Thomas H. Lee Partners of Boston, the most recent buyer, "has pocketed around $77 million in profit, even as the company's fortunes have declined," says the Times.
Simmons let go more than 1000 employees - a quarter of its workforce - last year. It's soon to file for bankruptcy. There's nice sidebar as well on former Simmons boss Charlie Eitel, who took in more than $40 million, including a corporate jet and yacht. Eitel dubbed his corporate strategy, relates the Times, "the Great Game of Life." Which is kind of how Henry Hill saw things too.