Back in summer 2018 – we mentioned that Mattress Firm had filed for Chapter 11 Bankruptcy.
In just under 50 days, they “emerged” from their bankruptcy, closing about 700 stores – and are apparently “back on track.”
We just wonder what the heck that means?
They now still have 2,600 stores across the country (just 10,000 employees). In the bankruptcy “emergence,” they also received over half a billion dollars of capital. Huh?
And each and every Mattress Firm location we observe is ALWAYS vacant for the most part. Regardless of the time or day of the week. Always. A.L.W.A.Y.S.
But we’re not knocking them. We just wonder why they need to have so many locations if the actual showrooms are not buzzing with or generating business?
It’s very possible that simply “name recognition” by having thousands of locations is worth the same (or more) than advertising. But with the added benefit of having thousands of “mini-warehouses” that they can deliver products to their customers who buy online.
We don’t know. But it’s a fascinating look at one of the oddest industries remaining in our country.
Below is a story about their “recovery.”
Mattress Firm emerges from Chapter 11 bankruptcy
Mattress Firm, the nation’s largest mattress retailer, has emerged from Chapter 11 bankruptcy with 700 fewer stores.
The Houston company, which filed for bankruptcy protection in October 2018, completed its financial reorganization and secured $525 million in financing to stay in business. In the process, the retailer got out of 700 store leases in underperforming and overlapping locations, bringing its store count to 2,600 nationally.
“We knew that our unprecedented growth had led to duplicative store locations in many of our markets,” Steve Stagner, the company’s CEO, said in a statement. “Now, having completed our operational and financial restructuring, we have the right store locations to not only better serve our customers, but also to fuel future growth.”
Mattress Firm, which started in 1986 with a small store in Sharpstown, grew to become the dominant player in the U.S. bedding industry with $3.2 billion in sales and 9,500 employees. As the company gobbled up dozens of competitors, the retailer struggled under the weight of its debt, burgeoning store count and the growing costs of operating and rebranding them.
At the same time, Mattress Firm faced growing competition from online competitors that ship cheaper foam mattresses. Mattress Firm thought it found salvation in Steinhoff International when the South African retail conglomerate paid $3.8 billion to acquire the company in 2016. Steinhoff, however, became embroiled last year in a financial accounting scandal, which brought the extent of Mattress Firm’s financial problems to light.
Mattress Firm, in its initial bankruptcy filing, said it had $3.2 billion of debt. It was not clear how much debt the company shed in the bankruptcy proceedings. Mattress Firm did not immediately respond to a request for comment.
Mattress Firm emerged from bankruptcy in 48 days, which was within the company’s expected timeframe. Chapter 11 bankruptcy allows companies to restructure operations and finances while protecting them from creditors.
Mattress Firm worked with AlixPartners as its financial adviser, Guggenheim Securities as its restructuring adviser and Sidley Austin as its legal counsel. A&G Realty Partners was hired to close stores and restructure leases. Barclays arranged exit financing for the retailer.”