Mattress Firm has filed for bankruptcy and could close up to 700 stores

Mattress Firm has filed for bankruptcy and could close up to 700 stores

Mary Hanbury 2h

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Mattress Firm's large fleet of stores has come under scrutiny in recent years. Business Insider/Mary Hanbury

• Mattress Firm has filed for Chapter 11 bankruptcy protection, it said in a press release Friday.
• As part of its bankruptcy restructuring, Mattress Firm could close as many as 700 stores, the company said.
• It is the largest specialty mattress retailer in the United States, with 3,272 stores, according to Wedbush analyst Seth Basham. Mattress Firm has increasingly come under pressure as startups such as Casper innovate the experience of mattress shopping and take market share.
• Last October, Mattress Firm filed a lawsuit against two former employees, a broker, and a group of developers accusing them of conspiring to push the company to aggressively expand.

Mattress Firm has filed for Chapter 11 bankruptcy protection, it said in a press release Friday.

With an estimated 3,272 stores, according to Wedbush analyst Seth Basham, it is the largest specialty mattress retailer in the US and has increasingly come under pressure as startups such as Casper innovate the experience of mattress shopping and take market share.

Mattress Firm has been struggling under a heavy debt load. It owes the mattress producer Serta Simmons, its largest creditor, just over $90 million, according to the bankruptcy filing.

As part of its bankruptcy restructuring, Mattress Firm could close as many as 700 stores, the company said. Two hundred stores are expected to close in the next few days.

"The process we have initiated today will allow us to strengthen our balance sheet and accelerate the optimization of our store portfolio," Mattress Firm CEO Steve Stagner said in a statement.

"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."

Reports that the mattress retailer was considering filing for bankruptcy surfaced in August.

It has been an eventful few months for the company. In the span of a year, it has been accused by internet sleuths of running a money-laundering operation, announced it would be closing almost 200 stores, and watched as its parent company's business practices have been investigated.

Last October, Mattress Firm filed a lawsuit against two former employees, a broker, and a group of developers accusing them of conspiring to push the company to aggressively expand and open stores.

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