Mattress Firm Files for Bankruptcy, to Close 700 Stores
Specialty mattress retailer Mattress Firm late last week filed voluntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court in Delaware. The move was made, according to Mattress Firm, to "strengthen its balance sheet and optimize its store footprint." The largest U.S. mattress retailer said it plans to close 700 of its 3,230 company-owned stores. Those stores are located "in certain markets where we have too many locations in close proximity to each other," CEO Steve Stagner said in a statement. More than 200 stores will close within days. Mattress Firm has nearly 10,000 employees and another 125 franchised locations. In conjunction with its pre-packaged restructuring plan, Mattress Firm also received commitments for approximately $250 million in debtor-in-possession financing, which will be available to support its ongoing operations during the Chapter 11 proceedings. The company also obtained commitments for $525 million of senior secured credit facilities enabling it to emerge from Chapter 11 and support operations afterwards. Mattress Firm said it expects to complete the pre-packaged restructuring process within the next 45 days to 60 days.
Total Retail's Take: The news about Mattress Firm isn't surprising. In August, news came out that the Houston-based company was considering a potential bankruptcy filing as a way to get out of costly store leases and shut some of its 3,000 locations that are losing money. Mattress Firm has been grappling with declining sales after an acquisition spree gone bad; a scandal at its parent company, Steinhoff International; and the surge of bed-in-a-box online retailers, such as Casper, Leesa, and Purple, which the company has had to compete with. Mattress Firm is committed to emerging a stronger company post-bankruptcy. It's continuing to serve customers as usual at stores across the nation and online; anticipates that deliveries will be made as scheduled; and intends that warranties, guarantees and other customer programs will be honored as usual.