Mattress Firm announced today it has filed Chapter 11 in the U.S. Bankruptcy Court in Delaware and plans to close 700 underperforming stores, approximately 200 of which will close within the next few days. The company plans to exit the court process in 45 to 60 days. This announcement comes days after rumors of bankruptcy began circulating.
The mattress retailer cited several reasons for this decision. The company's rebranding of 1,300 Sleep's and Sleep Train stores was met with several challenges. Additionally, the company showed little presence in the high-end markets, faced ineffective brand marketing strategies and changes in its key suppliers, its lawsuit with Tempur-Pedic being one of the most prominent supplier changes. Likely, new competition in the mattress marketplace also contributed.
“Mattress Firm is the nation’s leading specialty mattress retailer, and we will continue to provide unmatched value to our customers by offering the best quality beds at prices that fit any budget today, tomorrow and into the future,” Steve Stagner, Executive Chairman, President and CEO of Mattress Firm, said in a prepared statement. “We thank our suppliers and partners for their continued support, as well as the contractors we partner with to make deliveries across our markets, all of whom will continue to be paid in full in the normal course for products and services provided. We also thank our team members for their continued commitment and dedication to serving our customers.”
Mattress Firm has a commitment from Barclays Bank and Citizens Bank for $250 million in bankruptcy finance. With those 700 stores closed and money saved from those leases, the company plans to "improve our product offering, provide greater value to our customers, open new stores in new markets and strategically expand in existing markets where we see the greatest opportunities to serve our customers," Stagner said.
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