Mattress Firm Files for Bankruptcy, Could Close Up to 700 Stores Nationwide
Mattress chain Mattress Firm filed for Chapter 11 today with plans to close up to 21 percent of its 3,300 stores across the country, the company announced.
Of the 700 slated for closure, 200 of them will shutter “in the next few days,” according to a press release. Those include its two Brooklyn locations at 945 Flatbush Avenue in Flatbush and 5121 Avenue U in Marine Park, its Staten Island outpost at 1462 Hylan Boulevard in Dongan Hills and one in the Washington, D.C.-area at 1701 Rockville Pike in Rockville, Md.
Under the bankruptcy restructuring plan, the Houston-based Mattress Firm received about $250 million in financing to stay afloat and a commitment for $525 million of credit facilities which the brand hopes will get them out of Chapter 11 within two months.
“The process we have initiated today will allow us to strengthen our balance sheet and accelerate the optimization of our store portfolio,” Steve Stagner, the president and CEO of Mattress Firm, 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.”
Court documents show that the 32-year-old Mattress Firm owes millions of dollars in debt to mattress manufacturers including $65.7 million to Simmons Bedding Company and $25.5 million to Serta.
The bankruptcy filing comes as parent company South African-based Steinhoff international Holdings has seen declining revenues and sales, amid increased competition from online startups like Casper.
“Traditional mattress retailers have been alienating customers for decades and are now buckling under pressure,” Philip Krim, the CEO and co-founder of Casper, said in a statement. “Casper has turned a tired industry on its head with innovative products and a superior shopping experience. While legacy firms are shuttering doors, we are adding 200-owned stores to our fleet in response to customer demand.”
In December 2017, Steinhoff CEO Markus Jooste and its executive chairman, Christo Wiese, resigned as a result of investigations into accounting irregularities, The Wall Street Journal reported.