The nation’s largest mattress retailer has filed for Chapter 11 protection in Delaware as it works to cancel hundreds of leases and close stores.
No Delaware stores were included in a list of 200 locations that will close in the near future.
Mattress Firm has grown rapidly through acquisitions and expansion, betting that strong demand and low personnel expenses for strip mall stores would allow the company to dominate the industry
Some of the chain’s locations basically compete with one another with multiple stores in a small geographic area.
The company is also facing stiff competition from “mattress in a box” online sellers like Caspar as well as furniture retailers that have refused to bow out of the profitable business.
A release stated that the company will undertake a prepackaged bankruptcy that generally consists of the company reaching a deal with major creditors prior to the filing. Creditors that are not part of the agreement are able to object to the terms.
Steve Stagner, CEO of Mattress Firm, said, “The process we have initiated today will allow us to strengthen our balance sheet and accelerate the optimization of our store portfolio. Leading up to the holiday shopping season, we will exit up to 700 stores in certain markets where we have too many locations in close proximity to each other. We intend to use the additional liquidity from these actions 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.”
