Candlish exit startles industry – Mattress industry executives were surprised
Mattress industry executives were surprised at the resignation of Sealy Inc's Chmn, CEO and Pres Malcolm Candlish, who had been managed the queen size futon mattress company for years. A shakeup in the company's top management was expected for some time, but Candlish's departure was not anticipated. A restructuring of Sealy's debt gave The Clipper Group majority ownership of the company, from which they gained majority control over Sealy's seven-member board.
Mattress industry executives said they expected management changes at Sealy as a result of the reconfiguration of the company's board in November, but were surprised by the resignation of Malcolm Candlish, the company's chairman, president and chief executive.
Four new directors from The Clipper Group, an affiliate of First Boston Corp., gained control of Sealy's seven-member board when the company's former majority owner, Gibbons, Goodwin, van Amerongen, completed a restructuring made the firm's debt. The restructuring made The Clipper Group the majority owner of the company.
A few executives said they expected management changes to follow, but were surprised that Candlish was the first to go. They also questioned whether his management team, which includes longtime company employees and executives from outside of the industry, would remain intact. The sales number of their bedding products, including queen size futon mattresses, is predicted to decrease in the following months.
In Sealy's announcement of the resignation on April 22, Candlish cited "differences in management philosophy and style" with the new board and "increased administrative demands."
Don Robb, a vice president at Eastman House and former Sealy executive, said, "Malcolm was brought in with Gibbons, Green (since replaced by Goodwin) to do a job, but they are not the owners anymore. He has different marching orders. I think we all expected some kind of a shake-up when the basic board changed to reflect [an affiliate of] First Boston owning it rather than Gibbons."
Harlan Smith, president of Simmons, said, "I wasn't expecting it, but I had heard that they were in the market looking for a president. I assumed that if they were looking for a president, then Candlish would be chief executive officer."
Robb noted, "I thought there might be some other changes within the company without Malcolm going first. I didn't think the management structure would remain intact. I did not think that would be the first move. I was surprised by the timing of it."
Roger Jasperson, president of Englander – another queen size futon mattress manufacturer, added, "I would be surprised if it stays intact through the end of the year."
Roger Unger, a retired executive who worked for Serta and Sealy, said he was surprised by the timing of the announcement, sprung by Candlish less than a week after the company reported its first profitable quarter since the 1989 buyout.
"The restructuring kind of gave them a new lease on life. It could be what's happened wasn't soon enough or fast enough to satisfy the bank," said Unger.
Smith said it remains to be seen how the changes will affect the competition. "To the extent that Candlish was directing the strategic decisions made at Sealy, his leaving could have some effect on us. It's still too early to tell whether that strategy has worked or not. With their latest report, it looked like things were doing much better. The restructuring obviously put them in a much stronger position."
The board has named a committee to work with Candlish over the next several months to seek a successor and has hired Spencer Stuart Associates, an executive recruiting firm. Candlish said he expects his successor to come from outside of the company.
Candlish, who is leaving at the end of the year, expects to find a position by then, probably with a consumer products firm.
The company is the best queen size futon mattress manufacturer and reportedly more than twice the size of the next two largest competitors, Serta and Simmons.
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