TAMPA — Even by standards of this gut-wrenching recession, Spring Air Co.'s reversal of fortune was stark.
Less than three months ago, the 83-year-old mattress manufacturer said sales were up, and it was buoyed by a wealthy new owner's plan to open a $30 million manufacturing plant in Oklahoma, creating up to 300 jobs.
This week, the company abruptly closed its Tampa headquarters, its Tampa plant and seven other plants across the country. The shutdown put about 850 employees, including 157 in Tampa, out of work.
Employees here found out Tuesday that a planned management buyout of the company had fizzled and that American Capital, a Bethesda, Md., equity investor controlling the company, was unwilling to pump in any more money.
Based on earlier reports, American Capital had invested more than $200 million over the past year. American Capital spokeswoman Jennifer Burke declined comment for this story.
"At this point, all the plants have been shut, so essentially … they've ceased operations," said Stan Steinreich, a public relations executive in New Jersey who represents Spring Air. And as for converting a 351,000-square-foot facility in Durant, Okla., into the company's ninth and most modern plant, "Well that's certainly on hold," he said with a grim laugh.
In a WARN (Worker Adjustment and Retraining Notification) notice filed with the state Wednesday, Spring Air indicated it was laying off 157 workers in Tampa by July 2.
However, Steinreich said most if not all workers here left the company Tuesday and production ceased at the Falkenburg Road plant, the largest manufacturing site in the Spring Air network making all five of its mattress lines. Workers were told they would be paid just through the end of the day.
Steinreich said the local workforce was split about 50-50 between headquarters and manufacturing.
According to trade publication Furniture/Today, Spring Air was the sixth-largest U.S. bedding producer based on 2007 sales of $272 million, down 17 percent. In 2008, sales fell further to about $200 million.
In an interview with the St. Petersburg Times in February, Spring Air acting chief executive Steve Cumbow predicted revenue would grow this year to $220 million. But the turnaround apparently wasn't strong enough to appease American Capital.
Spring Air has old roots in a network of bedding company licensees nationwide, including Consolidated Bedding in Tampa. In 2007, 13 of the licensees pooled together and bought the majority of the franchisees. After a brief stay in Chicago, the management team relocated the headquarters to Tampa.
About a year ago, American Capital took over as the lead financial sponsor of the company from primary shareholder H.I.G. Capital in Boston.
It was unclear if the company planned to file bankruptcy.
According to Furniture/Today, despite the closure of the manufacturing plants and Tampa office, Spring Air's licensees are expected to remain in business.