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SEALY CORPORATION

One Office Parkway

Trinity, North Carolina 27370

July 19, 2005

Division of Corporation Finance

Securities and Exchange Commission

Station Place

100 F Street, N.E.

Washington, D.C.  20549

Re:                             Sealy
Corporation

Registration
Statement on Form S-1

Filed June 30,
2005

File No. 333-126280

Ladies and Gentlemen:

As you are aware, Sealy Corporation (“Sealy”) filed on June 30,
2005 a Registration Statement on Form S-1 (the “S-1”) relating to the
contemplated initial public offering of its common stock (the “IPO”).  The purpose of this letter is to provide
additional factual background and support relating to Sealy’s accounting under
the fair value recognition provision of Statement of Financial Accounting
Standards No. 123, “Accounting for Stock Based Compensation,” (“FAS 123”)
for certain issuances of common stock and grants of stock options.  As permitted by FAS 123, Sealy accounts for
its stock option and stock incentive plans in accordance with Accounting
Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”
(“APB 25”).

Although Sealy has not determined the range of the expected initial
offering price for the IPO to be disclosed in the S-1, for purposes of your
review and analysis of Sealy’s accounting under FAS 123 and APB 25 you may
assume that the midpoint of the range of the expected initial offering price
will be in excess of the purchase price for each issuance of common stock and
the exercise price for each grant of stock options, respectively, to employees
and directors from and after June 30, 2004.

Transactional Background

As set forth in the S-1, Sealy and its subsidiaries engaged in several
significant transactions during 2004.  In
an effort to assist you in your review of the S-1, we are providing on a supplemental
basis the following summary background information on these transactions as
well as on common stock issuances and stock option grants from and after June 30,
2004.

On April 6,
2004, Sealy was recapitalized (the “Recapitalization”), with existing
indebtedness repaid, new indebtedness incurred and with all prior stockholders
of Sealy receiving cash for their shares other than certain rollover
stockholders.  From and after such date,
Sealy became principally owned by an affiliate of Kohlberg Kravis Roberts &
Co. L.P. (“KKR”).   Immediately after the
Recapitalization, Sealy effectuated a split of shares of its common stock so
that the effective purchase price by KKR in the Recapitalization was $5.00 per
share.  As part of the Recapitalization,
it was contemplated that new options would be granted to senior employees of
Sealy and additional third party investors would subsequently invest in Sealy
common stock.

On July 16,
2004, Sealy issued $75.0 million of 10% senior subordinated pay-in-kind (PIK) debt
securities (the “PIK Notes”) and sold 10,836,563 shares of its common stock
(equivalent to approximately 11.4% of shares outstanding) to three independent
third parties (The Northwestern Mutual Life Insurance Company, Teachers
Insurance Annuity Association of America and Sealy Paterson LLC) at a purchase
price of $4.39 per share (for total proceeds of $47.5 million).  The proceeds from these two transactions were
utilized (i) to declare a dividend of approximately $0.61 per share and (ii) to
repurchase 13,650,000 shares of Sealy common stock from current shareholders at
a price of $5.00 per share ($4.39 per share plus the $0.61 per share dividend)
(the “July Transactions”).  The
purchase price for the July Transactions (as well as the July option
grants discussed below) was adjusted from $5.00 per share to $4.39 per share in
order to give effect to the value of the $0.61 per share dividend to existing
holders, the benefit of which these purchasers did not receive.

In the S-1, we have disclosed that certain employees and directors have
purchased common stock and/or been granted options to purchase common stock
subsequent to the July Transactions through and including April 6,
2005.  When these issuances and stock
option grants occurred, neither Sealy nor its shareholders contemplated an
IPO.  None of Sealy management, its Board
of Directors or KKR engaged in significant activities in contemplation of a
potential IPO until early May 2005, and management did not meet with
potential underwriters regarding execution of an IPO until June 8, 2005.

Grants and Acquisitions of Stock and Options
over Last Year

As disclosed in Note 2 to Sealy’s audited financial statements included
as part of the S-1, as permitted by FAS 123 Sealy accounts for employee stock
compensation under APB 25.  Set forth
below is a table and narrative discussion relating to each of the common stock
issuances and stock option grants made to employees or directors of Sealy from June 30,
2004 through the date of this letter.

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  Date of Grant or

  Issuance

  Number of

  Stock Options

  Granted

  Exercise Price

  of Stock

  Options

  Number of

  Common

  Shares Issued

  Price of

  Common

  Shares

  July 20,
  2004

  11,843,071

  $

  4.39

  October 6,
  2004

  130,017

  $

  4.39

  January 11,
  2005

  6,844

  $

  4.39

  January 12,
  2005

  66,541

  $

  4.39

  April 6,
  2005

  16,000

  $

  6.25

  April 6,
  2005

  596,786

  $

  6.25

On July 20, 2004, Sealy’s Board of Directors granted 11,843,071
options on Sealy’s common stock at an exercise price of $4.39 per share.  These grants were made shortly after the July Transactions
pursuant to Sealy’s 2004 stock option plan (the “Plan”) and were contemplated
in connection with the Recapitalization.(1)
Options were granted to approximately 125 of Sealy’s most senior employees and
provided for vesting over a five year period based on Sealy meeting certain
performance goals, as well as the individual remaining with Sealy.

On October 6, 2004, the Board of Directors granted 130,017 options
under the Plan at an exercise price of $4.39 per share.  These grants were made to nine Sealy
employees who had either been promoted or hired as a senior Sealy manager since
July 20, 2004 and were made pursuant to the same terms as those in July 2004.

On January 11, 2005, Sealy, as authorized by its Board of
Directors, completed the sale of approximately 6,844 shares of Common Stock at
$4.39 per share to one of Sealy’s independent directors, James Johnston.  In addition, on January 12, 2005, the
Board of Directors granted 66,541 options under the Plan at an exercise price
of $4.39 per share.  These grants were
made to nine Sealy employees who had either been promoted or hired as a senior
Sealy manager since October 6, 2004 and were made pursuant to the same
terms as the earlier grants.

On April 6, 2005, Sealy, as authorized by its Board of Directors,
completed the sale of 16,000 shares of Common Stock at $6.25 per share to a
recently hired Sealy executive.  In
addition, on that same date, the Board of Directors granted 596,786 options
under the Plan at an exercise price of $6.25 per share.  These grants were made to six Sealy employees
who had either been promoted or hired as a senior Sealy manager since January 12,
2005 and were made pursuant to the same terms as the earlier grants.

(1)                                  The
grant of these options and their connection to the Recapitalization were
disclosed publicly shortly following issuance.
See pages 7 and 68 of Sealy Mattress Corporation Registration Statement
on Form S-4 (File No. 333-117081) dated August 13, 2004.

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Determination of Fair Value

Sealy believes that all of the above listed stock issuances and options
were issued and granted at prices not less than the fair value of Sealy at
their dates of issuance or grant.
Paragraph 9 of FAS 123 defines fair value and states, in part:

“. . . the amount at
which an asset could be bought or sold in a current transaction between willing
parties, that is, other than in a forced or liquidation sale.  Quoted market prices in active markets are
the best evidence of fair value and are to be used as the basis for
measurement, if available.  If quoted
market prices are not available, the estimate of fair value is based on the
best information available in the circumstances. . .”

The fair value and exercise price for each stock issuance and option
grant subsequent to the July Transactions was determined and approved by
the Sealy Board of Directors after careful consideration of a number of factors
deemed relevant and appropriate.  These
factors generally included the proximity in time of the grant and issuance to
the July Transactions, Sealy’s financial condition and results of
operations during the relevant period, the general market conditions in which
Sealy operates, and its competitors.

With respect to the July 2004 grants, the Sealy Board of Directors
believed that the fair market price of the July Transactions provided
overwhelming evidence of the fair value of Sealy common stock.  The Board of Directors determined that the
bona fide arm’s-length sales of approximately 11.4% of Sealy’s common stock
only days before to three independent third parties, as well as the sale to
Sealy of 13,650,000 shares by then current shareholders, established the fair
value of Sealy’s common stock as $4.39 per share.

With respect to the October 2004 and January 2005
transactions, the Board of Directors determined that the July Transactions
continued to be the best indication of fair value for Sealy’s common stock, as
there had been no other third-party sales of Sealy common stock since that date
and there had been no milestones or material changes in Sealy’s prospects,
financial condition or operations, or to industry or general economic
conditions.

With respect to the April transactions, since there had been no
recent arm’s-length sales of Sealy common stock and since Sealy’s results for
fiscal year 2004 had been previously issued in February 2005, the Board of
Directors determined that to help determine fair value of Sealy’s common stock
it was appropriate to utilize a valuation based on a multiple of adjusted
EBITDA for the preceding 12 months.
Under this approach, a multiple (determined by the Board of Directors to
be 9x) of adjusted EBITDA for the preceding 12 months (as of the end of the
most recent quarter) is calculated and reduced by the amount of Sealy’s net
debt (debt less cash and cash equivalents) at the end of the same period.  Added to that amount is the amount that Sealy
would receive if all “in-the-money” stock options were exercised and then the
total is divided by the fully diluted number of shares outstanding to arrive at
a per share amount, which is then reduced by

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20% for reasons described below.
Set forth below is the calculation utilized in connection with the April transactions:

  Adjusted
  EBITDA (LTM ended 2/27/05)

  $

  204,021,000

  Multiple

  x 9

  Enterprise Value

  $

  1,836,189,000

  Less: Total Net Debt

  $

  1,030,421,000

  Equity Value

  $

  805,768,000

  Plus: Option Exercise Cost

  $

  59,875,639

  $

  865,643,639

  Fully Diluted Shares

  ÷
  110,852,116

  Share Value

  $

  7.81

  less 20% discount

  $

  1.56

  Share Fair Market Value

  $

  6.25

The Board of Directors believed that an approach based on a multiple of
adjusted EBITDA should be utilized to determine the then-current fair value of
Sealy common stock in large part based upon the experience of the members of
the Board of Directors (most of whom are actively involved in the valuing
entities for purposes of acquisitions and dispositions). Specifically, the
Board of Directors determined that a 9x multiple was appropriate based upon the
recent Recapitalization (pursuant to which KKR acquired its controlling interest
in Sealy at approximately the same multiple), as well as based upon the November 2003
acquisition of a principal Sealy competitor, Simmons Company, by THL Bedding
Company.  Moreover, the Board of
Directors determined that a 20% discount to the adjusted EBITDA multiple
valuation was appropriate due to the fact that (i) such options and shares
would be subject to substantial restrictions on transferability imposed under
the applicable award agreement and a related shareholder’s agreement and (ii) such
options and shares would not receive any “control premium” as opposed to the
comparison transactions (which were for a controlling interest in a company).

Significant Factors Contributing to the
Difference between Fair Value as of the Date of Issuance or Grant and Estimated
IPO Price

Several factors that were not anticipated on the date of each of the
common stock issuances and stock option grants discussed above have occurred or
are expected to occur in connection with the IPO that have resulted or are
expected to result in an increased fair value of Sealy’s common stock, as
follows:

•                  Amendment of the Credit Facility.
On April 14, 2005, Sealy amended its senior secured
credit facility.  The amendment reduced
the applicable interest rate margin charged under the senior secured term loan
and resulted in the incremental incurrence of $100 million of indebtedness
under the facility, with such borrowings used to repay amounts outstanding
under a separate senior unsecured term loan.
The effect of the amendment and related transactions was to reduce Sealy’s
interest expense by $4.2 million annually on a pro forma basis.

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Moreover, the amendment provided Sealy’s
direct subsidiary, Sealy Mattress Corporation, with greater flexibility to make
dividend payments to Sealy and to repay certain subordinated debt, provided
that certain leverage ratio tests and other conditions are met.   Sealy, which is a holding company with no
operations or revenues separate from its ownership of Sealy Mattress
Corporation, would be unable to pay dividends to its shareholders unless Sealy
Mattress Corporation pays dividends or makes other distributions to Sealy. The
amendment provides Sealy Mattress Corporation with greater flexibility in this
regard, in addition to the expected reduction in interest expense, each of
which is expected to have a positive effect on fair value of Sealy’s common
stock.

•                  Completion of the IPO.
The IPO will further enable Sealy Mattress Corporation to make distributions
to Sealy and for Sealy potentially to pay dividends to its stockholders, again
increasing fair value.  Specifically, the
net proceeds of the IPO (other than from sales by selling shareholders) will
create a significant “basket” under the covenants relating to Sealy’s
indebtedness, from which future distributions (from Sealy Mattress Corporation
to Sealy and from Sealy to its shareholders) can be made.

•                  Reduced Leverage.  As
disclosed in the S-1, Sealy intends to use all of the net proceeds of the IPO
received by it to reduce its leverage.
This reduced leverage will affect Sealy’s “net equity value”, increasing
the overall fair value of the equity.
Similarly, under the adjusted EBITDA multiple valuation approach
utilized by the Board of Directors in April 2005, adjusted EBITDA is
reduced by net debt, meaning that a reduction in leverage will have a positive
effect on fair value.  At the time of the
stock issuances and stock option grants referred to above, there had been no
significant reduction in leverage of Sealy since the July Transactions.

Conclusion

We believe we have appropriately accounted for all stock issued and
options granted to employees and directors from and after June 30, 2004 in
accordance with generally accepted accounting principles.  We welcome the opportunity to discuss this
further if you so desire.  Please feel
free to contact me at (336) 861-3724.

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Sincerely,

  /s/ JAMES B. HIRSHORN

  James B. Hirshorn

  Executive Vice President and Chief
  Financial Officer

Copies to:

Kenneth L. Walker, Sealy

Jeff Kirkland, Deloitte & Touche LLP

Joseph Kaufman, Simpson Thache