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Verlo Mattress franchisee in Milwaukee in receivership
MILWAUKEE — The franchisee group operating six area Verlo Mattress Factory Stores has filed receivership documents for protection from creditors. In a Milwaukee circuit court, the Milwaukee Journal Sentinel reported online.
Verlo Mattress Factory and Outlets of Greater Milwaukee's operations include the stores six Wisconsin stores operated by Greg Gardetto and Mike Murphy, the newspaper said. A real estate and investment firm, Marcus Investments, is seeking court approval to buy the operation and continue running the stores as Verlo.
The petition to appoint a receiver lists the franchisee's book value at $2 million and its debt at $1.7 million, according to the report.
It added that the stores faced weakened demand due to the recession and new competition from Mattress Firm and from Steinhafels' expansion with freestanding bedding stores. Both are Top 100 companies.
"Their business is overleveraged," a Marcus official told Journal Sentinel, adding that Gardetto bought the franchise back in 2005 when the economy was stronger.