Mattress Firm filed for Chapter 11 bankruptcy protection and plans to close as many as 700 of its 3,500 stores as it restructures.
"The process we have initiated today will allow us to strengthen our balance sheet and accelerate the optimization of our store portfolio," said Steve Stagner, executive chairman, president and CEO, in a press release. "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."
The retailer stopped selling Sealy mattresses this year after a dispute with that vendor. And several rivals are trying to take market share, including Casper, which has announced plans to open about 200 stores.
Mattress Firm has received commitments for approximately $250 million in debtor-in-possession financing. The company has also obtained commitments for about $525 million in senior-secured-credit facilities, which would enable emergence from Chapter 11 and help provide support for its operations thereafter. Mattress Firm says it intends to complete the prepackaged restructuring process within the next 45 to 60 days.
To facilitate the store-optimization plan, Mattress Firm has filed motions seeking authority to reject as many as 700 leases. Initially, some 200 stores are to be closed over the next few days. Decisions about additional closures will follow over the next few weeks.
By Brannon Boswell
Executive Editor, Commerce + Communities Today
