Nationwide mattress retailer Mattress Firm recently filed for Chapter 11 bankruptcy. The filing comes amidst dwindling profits and increased competition from online start-up companies like Casper, Leesa, Saavta and Nectar. As part of the bankruptcy restructuring, the company plans to close 700 non-profitable stores across the country, focusing first in on those in close proximity to one another. So far, no stores in New Mexico are slated for closure, but that could change as the bankruptcy moves forward.
In a statement adjacent to the bankruptcy filing, company CEO Steve Stagner says that they plan to “use the additional liquidity” derived from store closings to “improve our product offering, provide greater value to our customers, open new stores in new markets, and strategically expand in existing markets.” The hope is that these changes, in addition to better debt management, will make the company both more profitable and more competitive.
Rumors began amongst industry insiders as far back as August that a bankruptcy filing might be on the way after disappointing profits reports.
This was a rough year for the store chain, with its parent company accused of “accounting irregularities” so extreme that it didn’t release full-year financials for the first time. The Chapter 11 restructuring plan brings the total number of brick and mortar stores closed in the past year up to 900, which represents more than a quarter of the company’s locations.
Mattress Firm is the largest independent mattress seller in the nation, with about 3,500 company-operated and franchised retail stores. It began independently back in 1986, and was purchased by a South African company, Steinhoff, for $3.8 billion in 2016.