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Dormia, Inc. Retail Affiliates File For Chapter 11

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Dormia, Inc. and several affiliated companies with retail stores operated under the same name, filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code here. Classic Sleep Products, Dormia’s wholesale mattress manufacturing business, is not affected by the move and continues to service its customers as usual. Dormia currently has 20 stores in nine states, including: New York, Connecticut, Florida, Georgia, Indiana, Kentucky, North Carolina, New Jersey and Ohio. The company plans to use the reorganization process to determine strategic options for the locations and approximately 50 employees working in the division. All stores will remain open for business during this process and will maintain its high standards of customer service. To enhance its liquidity, Dormia stores has received a commitment for a debtor-in-possession facility from The CIT Group. Beginning in 1999, Classic began to open retail stores under the Dormia brand in higher-end regional shopping malls throughout the country. The stores only sold its own line of high-end visco-elastic memory foam and latex mattresses that contour to your body. Classic Sleep Products are among the fastest-growing segment of the bedding market, and the parent company, which operates a wholesale manufacturing business, has continued its growth into 2008. That business is not affected by the Chapter 11 filing. “Like other specialty sleep manufacturers who entered the direct-to-consumer business over the past few years, we saw this as an opportunity to create another retail channel and to provide broad exposure for our brand,” said Classic Sleep Products President and CEO Mike Zippelli. “While some of the stores performed well over the years, we were never able to open enough locations to leverage the advertising and operational support in multiple markets.” Zippelli said that after the company made the move in order to refocus attention on growing its wholesale business, which is experiencing a more than 15-percent increase in 2008 sales compared to last year. “Classic is doing very well, and we did not want to negatively impact that business by supporting an unprofitable stores division,” he added. Classic Sleep Products, which sells Dormia sleep systems. are designed to help customers receive the maximum benefit out of each night’s sleep. Its mattresses are constructed with the finest components in the world including: all natural covers, New Zealand lambs wool, visco-elastic memory foam, unique tri-zone latex core and solid wood foundations. The company offers enhanced features such as a quilted mattress top and deluxe combination models that are comprised of memory and latex foam, as well as adjustable beds that allow each person to maximize their own sleep comfort. All Dormia bedding products are manufactured in the United States using hand-made craftsmanship and custom embroidery. Dormia products are the highest-quality sleep products available in the market today. To learn more, please call 800-679-3519 or visit www.dormia.com.

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