Tempur Sealy Buying Mattress Firm in $4 Billion Deal
Tempur Sealy International Inc announced on Tuesday it's buying retailer Mattress Firm in a cash-and-stock deal valued at about $4 billion, as the leading bedding maker looks to grow its business and stem a post-pandemic weakness in sales, reports CNBC. Mattress Firm, part-owned by Steinhoff International Holdings NV, is among the biggest bedding retailers in the U.S., with more than 2,300 brick-and-mortar store locations. The deal would give the combined company a footprint of about 3,000 stores globally, 30 online platforms and 71 manufacturing facilities. The deal is expected to close in the second half of 2024. After deal closure, Mattress Firm would operate as a separate business unit within Tempur Sealy.
Total Retail's Take: According to a Tempur Sealy press release, the addition of Mattress Firm is expected to enhance the company's ability to meet consumers' needs, expand growth opportunities, and streamline operations. Mattress companies have seen a slowdown in sales in the past several quarters, struggling to sustain the explosive growth in demand seen during the early months of the pandemic, when consumers upgraded their home furnishings. Earlier this year, Mattress Firm, a privately held company, withdrew its plans to go public and was exploring options for its business.
Tempur Sealy hasn't been immune to the market and category downturn, reporting a 2023 first quarter sales slump with a total net sales decrease of 2.5 percent and net income decrease of 34.7 percent. Mattress Firm previously filed for Chapter 11 and closed hundreds of stores in October 2018.
Tempur Sealy Chairman and CEO Scott Thompson said, "We're excited by the long-term growth prospects for our global vertically integrated company. This combination will accelerate our growth trajectory and enhance operating cash flow. Mattress Firm has been a valued retail partner for more than 35 years, and we look forward to welcoming their talented workforce of more than 8,100 employees to the Tempur Sealy family."
Tempur Sealy noted it has received a request for additional information and documentary material from the Federal Trade Commission. The companies believe they can ultimately clear the process either traditionally or through litigation and said they were considering all options to ensure closing, including store divestitures, according to CNBC.
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.