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The Sealy Wars

Photo Courtesy of BedTimes Magazine, August 2015.

Posturepedic for $29.99?!

How can that be, and who would offer such a price?

The start of the Sealy Wars is the topic of conversation in this Dos Marcos episode. Bob Hellyer, former EVP at Serta Simmons Bedding, rejoins Quinn and Kinsley to discuss the start of the infamous “Sealy Wars.”

He’s discussing how it started, what went down, and who won. Plus, they discuss the man behind the battle: Ernie Wiluger, and other legends of the industry and what they taught Bob and others about the art of the mattress sale. 

Did you miss our first episode with Bob paying tribute to his father? Check it out here.

FULL TRANSCRIPTION

Mark Kinsley: The story behind the Sealy wars, it was a battle for the brand. We have an expert on the subject matter today. Hey, and by the way, how did the Sealy wars actually create Mattress Firm? The Dos Marcos show begins right now in Bob Hellyer is Back.

Bob Hellyer: Hello boys. All

Mark Kinsley: right, how it’s time to get into it? I, you guys, you, you got a student here, so I’ve heard about the Sealy war.

I’ve heard bits and pieces about how it potentially shaped the industry we know today, but that’s about it. But this was a big deal and it was a very tumultuous time in the mattress category. You

Mark Quinn: know, mark, I’m, I’m glad we’re doing this episode, by the way, to frame it up, because there’s a lot of people listening to this show that have never heard any of these stories.

They don’t know the name Ernie Willer. They don’t know how Sealy evolved into what it is today. So, Bob, we’re really glad to have you on the show to like, uh, take everyone through it. So thanks for coming back. And tell us a little bit about like, how did the Sealy wars even start?

Bob Hellyer: Well, they, it basically started, um, with Ernie Wilger.

Uh, family owned Sealy of Ohio licensee, um, wanting to grow his company, uh, expand his company, and th his, his avenue for growth was to sell outside his existing, um, agreed upon geographic area and, uh, attempting to purchase other Sealy licensees to grow the business. And, uh, yeah.

Mark Quinn: So he just shipped into Wait though.

He just shipped into other geographies. Didn’t that piss off the other licensees ?

Bob Hellyer: Well, you should ask the captains that question because, uh, , the Celio of Ohio rep in Chicago was a character by the name of Jerry Rose. And he sold anyone who couldn’t get product because of, uh, from the existing, uh, in the case of Chicago, the DeKalb Seal, E licensee.

And it really, um, you know, when you go back to that time, there was select distribution. It was part of the way the mattress industry operated. And Ernie just would sell anybody and everybody. On a, uh, at a better price. I mean, if you were a retailer in Chicago at the time, uh, Polk Brothers, uh, Stevens Bedding, uh, it would not be unheard of to have two or three different posturepedic, priceless in your hand on any given day.

And you’d buy a truckload here one week and a truckload there next week. It was. . Just crazy. Um, and it was how the Sealy brand was built, quite frankly. It was built through retail, co-op advertising, just screaming who had the best price. Um, you know, the, the big mover was, and the old Sealy guys will clean me up, Larry McKay and, and, uh, Gary Fasio and people who lived it.

But there was the Hotel Posturepedic is the one that comes to mind. It was, I mean, $99 Twin Posturepedic 2 99. , um, but at times discounted way below that, um, you could even take it down to Texas. Houston was an incredible battleground during the Sealy wars and, um, Jack Smith who was running American bed down there, it was American Bed American bedding betting.

We’ll ask Carrie to get clarification on that, but, uh, ran advertised Sealy postures as low as $29 in. , um, and solo out of them. I mean, just imagine. And that business just exploded. And to speak to Mark Kinsley’s teaser, uh, um, Jack Smith’s brother-in-law was Harry Roberts, and Jack Smith was growing so fast.

He needed help resources. And he brought Paul, Steven Harry, down from South Dakota and put, put him to work at American Bedding, uh, American bedding eventually. I mean, he can’t make a lot of money selling $29 beds. Kind of ran outta steam and went upside down. And Paul, Steven, Harry, were sitting there going, we can go back to South Dakota or we can open a store in Houston.

And that’s the start of mattress.

Mark Kinsley: Hmm. Wow. All right, so let me, let me bring us back to this term. Sealy Wars. Yeah. Okay. So that sounds like maloff cocktails are being tossed into buildings and things are set on fire. I mean, it, it, it makes me think, okay, what, what was the war that was going on and how, how was the.

Or how were the battles being fought? What, what was

Bob Hellyer: the drama? It, the, the, the, okay. It was mult, it was stages. Initially it was purely price who could sell Posturepedic for less as a wholesaler into retail. Um, and it created, I mean, when you think about it in a given marketplace, there was such competition between who had the lowest Posturepedic price.

That it just dominated, um, the r o p advertising for you, digital people, r o p, run on press newspaper advertising where the majority of the business was being done. Um, so that, that really created the Sealy brand. And, and from the strength of all that volume growing that f. Um, Ernie would then go out having weakened some of the players in the network.

We’d go out and try to buy ’em, um, acquire, uh, licensees, and he would reach an agreement. And then, uh, Sealy Inc. Would come in and exercise, write a first refusal and block that purchase. So, Ernie Suum, uh, Claimed antitrust, um, didn’t think he was gonna win. In fact, he was so confident he wasn’t gonna win.

He went out and bought Stearns and Foster, uh, to be his national brand. And, and funny we didn’t discuss this earlier, but his first national advertising, it was kind of like Victor Caan with the Remington Razor. I love the product so much. I bought the company Ernie National Advertis. Standing in a flock of live sheep numbered the sheep had numbers on him.

That kind of was used later in life in this industry. Uh, drinking a cup of coffee and basically saying Stearns and Foster makes the finest bet. I love it so much. I bought the company and that was gonna be his, um, national footprint. And at this, uh, prior to that, he had bought lifetime foam from Sears. So he had a network of manufacturing that would allow him.

To be national cuz Stearns was very limited in manufacturing New Brunswick and, and Locklin. Um, so there he goes. He’s gonna build Stearns and Foster into this national brand. That’s how he’s gonna get big and, and, you know, meet his aspirations of being the king of the bedding industry. And then lo and behold, argued in Chicago.

Ernie had a young upstart lawyer named Dan Webb. Um, Sealy Inc. Had a established, uh, lawyer named Max w Wildman, kind of the king of the heap of lawyers in Chicago. Got into it.

Mark Quinn: And Dan, so Bob, what you’re, what you’re saying there though, I just wanna stop us there. It’s really David and Goliath, isn’t it? It is, right, because it’s Ernie, the small licensee going against Sealy, Inc.

And then it’s Dan Webb, a young new attorney against a veteran like corporate guy. So it’s like it, it lines up perfectly,

Bob Hellyer: doesn’t it? It really does it it absolutely. And lo and behold, Ernie won the case, got trouble damages, and basically used the judgment. To roll up Sealy, uh, with the exception of Patterson, New Jersey, which remained independent at today as a licensee.

And, uh, just amazing. Ernie didn’t see it coming. Um, but he was grateful that it did, and it was really kind of interesting. So from that, now he owns a 40 million brand Stearns and, well, 33 million brand Stearns and Foster, and he just acquired Sealy. Um, Stearns and Foster became deemphasized, uh, putting it nicely.

And, uh, we struggled for quite a while being, um, pardon the expression, redhead his stepchild, um, until 1993 when everything changed and we made it a luxury brand.

Mark Quinn: That’s when you hired me for the record. I’m glad you pinpointed that day.

Bob Hellyer: Absolutely, absolutely. You know, , I, I love Steve Stagner and Craig mc Andrews to death.

They’re my boys, but they talk me into hiring you and if there is a single blemish on their record with me. Well, I see.

Mark Quinn: So now I’m not one of your boys. Is that what I just

Bob Hellyer: heard you say? You’re one of my boys. You know, it’s,

Mark Kinsley: do you guys need me to, to, to talk you through this little, little counseling

Bob Hellyer: here?

I don’t know. You, you know, it, it, it’s like family. There’s always that one kid, you know what I mean?

Mark Quinn: Hey, I’m happy to be that kid. That’s okay. I, I, I will argue at all. And Bob could share some stories. It would probably, Uh, cement the opinion there into a, a fair assessment, but we aren’t gonna talk about that if All

right

Bob Hellyer: Bob so

If, if I thought it would humble you, I’d make the effort, but that ain’t gonna happen .

Mark Quinn: No, but it’ll um, alright. Right Bob, so off of me back on to the Sealy War Wars. So tell us a little bit about what kind of guy Ernie was to be, because he was really a character I. A, a quick story about Brennan, Texas in, he kept the Cadillac there.

He did. And Glen, one of the, the, the department, uh, supervisors kept Ernie’s Cadillac. And every time Ernie would come into town, Glen would go out there and it was under a tarp and he would polish it all up and clean it all up and have it for Ernie, ready for Ernie when he came into town to drive it around.

When Ernie ended up transitioning outta the business, he gave that car to Glen, didn’t he?

Bob Hellyer: He did. Yeah. Yeah, yeah. And you know, one, one of Ernie’s best friends was Sammy Finger and Oh yeah. That he spent a lot of time in Texas going back and forth between the plant and visiting with Sammy Finger. But Ernie, Ernie was bigger than.

Um, he was so focused, so driven, so goal-oriented. He was unflappable, but at the same time, there was just kind of a mischief, mischievous, soft side to him. I’ll never forget. Um, he came into Chicago and this is before the Sealy roll up, and he was still, uh, doing his best to grow the Stearns and Foster brand.

And, um, I got us an introduction at, um, Marshall Fields, which on Solak, the G M M and Marshall Fields suggest put, uh, Serta on the floor through Alva move in St. Louis. And Alva got corporate money and his own money and they, they did a hundred thousand dollars deal, which was huge money back then. Um, and so I’m pretty close to John Soloman and we had a conversation before Ernie coming to town and John said, you know, there’s no way we just put cert on the floor.

Uh, it was a hundred grand. I mean, it’s just not gonna happen. So Ernie, Ernie comes into town, I meet him in the lobby. Have the conversation. I share what John said and he said, well, let’s just have the meeting and see what happens. And we sit down and Ernie goes, I understand precedent. It’s been set. I’m here to give you $150,000.

Let’s go to lunch and tell like what? Oh, okay. And we went to lunch and that the deal was done. The whole thing transpired in less than a minute. Just incredible. Just, and, and that story could be retold across the country a hundred times. That’s he, he was just amazing that way. Just incredible. And then, um, you know, it, it, it’s so unfortunate, after he did the big leverage buyout of Sealy Inc.

Um, he came so close to buying Simmons. Price was agreed upon. He’d visit, he did his due diligence, visited the plant, was all gonna happen. And then his, his health unfortunately got bad and he was never able to buy Simmons. But uh, yeah, he was something else.

Mark Quinn: So Bob, really, after hearing this story, the, you know, a couple and there’s probably so many touchpoints, but you know, right out of it, you know, Stearns and Foster wouldn’t be what it was if Ernie hadn’t purchased it and seeing the potential, uh, mattress firm was kind of born outta some of that.

And, uh, really, you know, Ernie’s, you know, ethic and discipline and passion for the category really helped it grow a lot. And, uh, turn it kind of into what it is today, or it was the early

Bob Hellyer: beginnings for sure. Yeah, no question about it. And, um, you know, what, in the, um, Early Stearns and Foster days, he was, he was so sensitive to the integrity of the Stearns and Foster brand.

Mark Kinsley: You know, it’s, it’s, it’s a big vision to have. You know, back then when things were so regional, what was going through his mind and where did that vision come from? How did he see that as an opportunity when so many people were like, Hey, Big, bulky objects. They’re, you know, regionally manufactured, tough to move around.

What what led to that, you know, being a vision that was stuck in his, in his

Bob Hellyer: brain? You know, I, I, I wasn’t that close to him, but I I, in many conversations, and I, I heard him pontificate about this quite a bit, but he talked about how growth needs to be contiguous through advertising markets. Um, And I, I know a lot of retailers have practiced the same thing, but you don’t hopscotch around you, you grow organically and you start to bridge different advertising markets, uh, media markets.

And he absolutely believed that once he had a national footprint and could advertise nationally, then he could control the brand. And that was the

Mark Kinsley: ultimate goal. Felt like you didn’t have control of the brand. Yep. Yeah. And that, and that’s, that’s the warring aspect of it. I mean, competing product under the same label, uh, race to the bottom in terms of price point, trying to sell into somebody else’s marketplace at a lower price to drive ’em effectively, drive ’em out of business.

Yep.

Bob Hellyer: Yep. Hmm. Never.

Mark Kinsley: What, what was the result of, of the Sealy wars? I mean, after, let’s say after the dust kind of settled, did everything really kind of work in favor of this new entity and it was just like a rocket ship? Or was there more like shakeout and competition

Bob Hellyer: and more friction? You know, all of the above.

Mark, um, all of the above. It was, um, when you looked at Seal, Inc. Under. It took a long time, but eventually under the, uh, guidance of Gary fio, it became, um, structured. It was no longer the Wild West. It was fact-based selling. It was making intelligent decisions, you know, and I talk about Ernie having such an incredible impact.

No one close to him in the industry. The the other one, when you wanna look at legacies in the industry is, is Gary Fa. Because when you look at my generation and the next generation down Mark’s generation, he taught us the industry from a math perspective, uh, the art of the deal, how to win. Um, that was all fio and that, and that’s became the persona of Ceiling Inc.

Whether it was Stearns and Foster or Sealy branded products. Um, the other side of that was, Is Ernie rolled up the Sealy licensees. There were great mattress people and I’m, you know, the Kaplan Newman group is a perfect example that no longer had Sealy went out and found a new venture in the bedding industry and, and, you know, just started to put certed together and it was a rocket ship.

They had incredible success. Um, so it was kind of ying and yang and different things happening. You

Mark Quinn: know what’s consistent in both of those stories, Bob, is the acknowledgement that a brand. Would have value in the market and they were committed to that. Ernies especially was committed to that. And so were Kaplan Newman’s, like they made that commitment, they invested in the brand and, uh, knew that that was gonna be important for their, you know, long-term health.

And so I think, you know, that was. Always at the core of the, the focus. So it, it’s kind of, you know, so interesting to hear it, you know, all the way back from the beginning and now look at it. Right. You know, we, we talk about brand and preference and awareness and, you know, that’s, uh, that’s the, that’s the center of it all right.

Bob Hellyer: Yeah, no question about it. And, and, and, and it goes back to the, what we discussed in the earlier episode is the execution of retail and knowing how to sell the product. I mean, when you look at the Serta brand, um, it was a continuous wiring unit. Um, the original was super Lastic done by Spring Wall in the sixties.

It had evolved and it was a really good unit. Um, but boy, you, you go anywhere at retail. And that RSA knew how to sell that unit against pocketed coil, against offset against L F K. They loved that continuous wire unit. They knew how to sell it. Um, you look at, and I’ll pick on it. Look, look at that brand today.

It’s a me too unit. It lacks its own identity. Um, and really the advantage it had at the time, same advantage that Beautyrest had with the pocketed coil for so many years. Uh, and

Mark Quinn: you know what, mark, what Bob’s talking about, it’s kind of interesting for the younger people in the industry like. Sealy was the open coil, the LF K double offset, right?

That was the construct. Uh, Serta was known for the, uh, continuous coil, right? And then Simmons was always known for the pocketed coil, the fabric encased unit. And literally, if you talk to people, it was that simple as you defined the brands. , it was literally defined by the Innerspring core that each of the brands used.

Bob, do you think that’s a fair assessment of that back then?

Bob Hellyer: I do. I do. And, and prior to that, it was the combination of that core and the foundation. I mean, Sealy was steel slate, right? You know, Serta was triple beam. Same thing. Yep. Same

Mark Quinn: thing. Can’t hear you, mark,

Mark Kinsley: to bridge that divide a little bit, um, what do you think defines some of the major brands today?

Has it moved away from componentry or is there still a component piece of that puzzle that defines brands

Bob Hellyer: That’s a million dollar, que a billion dollar question for so many right now, mark. And the answer is yes. Um, you know, I, I think today, We as manufacturers try to put story before, feel i’ll, I’ll never forget one of the lessons my dad taught me and, um, and no one executed it better than Bob Wagner, who was the head of r and d at Sealy back in the eighties and early nineties is that there’re three keys to the kingdom.

If, if you wanna execute on product and win, you have to differentiate yourself aesthetically. Have a unique comfort level and a demonstrable reason to buy. So you look at what’s winning at retail today, and they nailed that Tempur-Pedic, I mean, unique comfort level. Nobody’s been able to replicate it because nobody’s had the coones to invest in the product enough to compete with 5.7 pound.

um, they’re trying to do it with three and a half pound foam and it’ll never work. So Temper has a unique comfort level. It’s definitely has a unique aesthetic. I mean, it kinda led the whole smooth top resurgence with their, with their design and that hand printing the foam to possible reason to buy. I mean, you know, not that hard.

The old Beautyrest with 47 and a half inches of wire in the coil had that dead bed feel. Nobody could replicate it. It had the pocketed coil in the, and the RSA demonstration used to be the body board where you could show it with, you know, it’s the hourglass shape board. It conforms this way, it supports this way all day long.

Mark Quinn: Well, and, and here we are. You guys, what’s so interesting to kind of wrap this, this episode up for us is, you know, you think about the Sealy wars and, and, and, you know, I’ve been in the industry 30 years and wasn’t back to Ernie’s days, but not too far after that. But Bob, just seeing the industry evolve, it’s, it’s so funny because it was defined by the core industry, spring unit, right at one point.

And now the complexity of this industry with direct to consumer and foamers selling direct to consumers and to retailers. And retailers, uh, you know, going direct online and, you know, foamers and innerspring, people selling direct to, I mean, like there used to be a very specific lane you had to stay in as a manufacturer or a retailer or a component.

Today it is all bets off, everything goes, and it is so much more complex. Branding is more complex. Marketing is more complex. Uh, private equity is, is thrown, uh, a monkey wrench into a lot of it. So this, it’s just so much different than it used to be. So it, it’s fun to reminisce and think about simpler times.

Um, anyway, any parting thoughts? Any questions, any things we didn’t ask that you think are important to reference?

Bob Hellyer: Well, if, if you, you just got me thinking about one thing I’d love to comment on, and that is direct to Consumer Mattress in a Box. It’s kind of amazing to me because I’ve looked closely at many of these companies and worked with many of these companies closely, and I would say plus or minus that much.

Every mattress in a box is the exact same thing. It’s a block of poly with a couple inches of memory foam glued to the top of it, rolled up and stuck in a box. By marketers, I mean, so it’s, it’s, it’s a marketing arm of the industry selling the same chunk of foam in a box, and just imagine if somebody actually innovated in that category.

Lots of opportunity.

Mark Quinn: Can’t hear you there, Mr. Kinsley. Sorry, my

Mark Kinsley: microphone is, Buzzing on, there’s, okay, it’s trash day. Let’s just put it that way. There’s a lot of, lot of noise.

I, I was thinking to myself, what have you seen? What, if anything, have you seen innovation in the roll pack mattress space? Is, is anything bubbled up that’s caught your eye or is it really just a bunch of me toos? .

Bob Hellyer: Um, well, no, it’s a bunch of me toos right now. I mean, there’s some marginal stuff, but you see it across all product lines.

I, I have a cooling story. I have a, a gel, so, uh, now there’s, there’re better ways to skin the cap, but stay tuned, we’ll see.

Mark Quinn: All right, so the answer Kinsley, cuz I know him really well, is yes. And screw you. I’m not telling you anything on this show, . No, I have the answer. And if you think I’m gonna tell you you’re wrong, you’re

Mark Kinsley: crazy, Bob.

I see you. I got it. If you’re watching on camera, this is Bob Heller’s. Uh, his evil workshop behind ya, but not evil. It’s his good workshop, but it’s his dungeon. Kinda like his Batman cave.

Bob Hellyer: It is my cave, absolutely. My wife Torah has allotted me 20 square feet of the house, and this is, this is my world, .

Mark Quinn: I love

Mark Kinsley: it.

It’s more than most people get, so,

Bob Hellyer: yeah. No, hey,

Mark Quinn: not complain. Not complaining. Well, Bob, it’s uh, great to have you on. It’s great to walk down memory lane there and you know, if. If you’re new to the industry, even if you’ve been in it for a while, um, share this episode with people. I think it’s really cool that we get to hear about the origin of the industry because for you to appreciate and value where we are, you need to know where we came from.

And, uh, we got a little bit of a lesson on that today and it was, uh, fun to talk through it, Bob. So thanks so much for being on the show. And, um, if you’re listening to this, uh, like I said, share it. Go to Spotify and iTunes and give us a, uh, review. We’d appreciate that and, uh, stay tuned. So much more.

Kinsley. Anything else you wanna add?

Mark Kinsley: You know, I just, one thing that hit me, I remember we had Harry Roberts come on the show, it’s been a while back, and I asked him, I go, do you remember a time. when your business was really firing on all cylinders back when he was, he, he and the crew were building mattress firm before they sold it, and Harry said one, there was a, there was a year where we really leaned into marketing the Sealy brand.

That’s all we focused on was Sealy. And he said, our business absolutely exploded to the point where people would come into our stores and write checks to Sealy. They thought we were sea. So it’s fun to see the Sealy wars, how it played out, how it shaped the industry, how it led to Mattress firm, and then how the Mattress firm crew really capitalized on that later in their

Bob Hellyer: business.

Can I share one quick story on Harry Robert? Yeah. My dear friend. Um, so yeah,

Mark Quinn: definitely like take some shots at him. We love

Bob Hellyer: that. He, he loves hearing that story. I’m, I’m, no, I’m just gonna try to embarrass him if I can. Um, I worked. Most closely with Harry than anyone else in developing the Stearns Luxury program.

I mean, we, we made it for certain it was gonna succeed at mattress firm before we even looked anywhere else with it. And Harry was just a huge contributor, as was Paul and Steve the whole bit. Um, so we launched it, um, in 93, in the first quarter of 1994. I get a call in my office and it’s Harry. And he hell here.

I just want you to know, we filled, filled the conference room up of cash and we’re rolling around naked in it. That’s how much money we’re making with Stearns and Foster

and I, I feel believe he, he, he was.

Mark Quinn: I, I would not surprise me. One, he

Mark Kinsley: was like, Scrooge McDuck, the, the cartoon where he dives into his pool full of gold . Well, at least he didn’t have honey on his body. Okay. Yeah. Right.

Mark Quinn: Well, now, now we have, we’re leaving you at the end of this podcast episode with the visualization of Harry, uh, Roberts rolling around naked in money.

So You’re

Bob Hellyer: welcome. Perfect. That’s all I was looking. Time well spent. Bob,

Mark Kinsley: thanks. Thanks again for being on the show. It’s been great having you here. If you didn’t listen to part one, go back and listen to part one with Bob as well. And, uh, hey, as this industry evolves and as these secret projects and products and new ideas start coming outta your brain, we gotta have you back to actually talk about ’em openly next time.

Look forward to it.

Bob Hellyer: You guys are awesome.

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