Sealy Corporation (NYSE: ZZ) makes mattresses ranging in price from $300 to as much as $5,000. The company is the largest mattress manufacturer in the United States with a wholesale market share of approximately 19.5%, 1.23 times greater than its next largest competitor.^[1] Over 90% of the company's sales come from traditional innerspring mattresses, while competing companies such as Tempur-pedic International (TPX) or Select Comfort (SCSS) focus more on specialty mattresses made of memory foam, air and latex bedding. The specialty mattress sector is growing at a faster rate in the U.S. than traditional bedding, as aging baby boomers are demanding these more expensive specialty beds to ease the pains of getting older.

Sealy is highly susceptible to changes in the U.S. housing market. If subprime lending woes have a prolonged effect on U.S. housing, bedding manufacturers will likely suffer as fewer families upgrade to larger homes (with more bedrooms) and buy second homes, both which drive mattress sales. In addition, the company may itself be over-extended with debt.

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