Mattress Firm, Inc. filed for bankruptcy on Friday. It says the company opened too many stores too close together. The stores indirectly competed with each other, resulting in a “cannibalization” of sales.
Mattress Firm’s Plans
The company, based in Houston, TX, filed for bankruptcy in a Delaware federal court Friday. It says it plans to continue operating but will close 700 stores. Currently, Mattress Firm operates over 3,200 stores and employees over 9,800 people.
Mattress Firm is the largest mattress retailer in the country. It has pursued rapid expansion over the last few years. In the last two years alone, the company bought over 1,300 stores from competitor companies.
The closures, it says, will help make the remaining stores more profitable.
In its court filing, Mattress Firm said its previous management made mistakes in the purchase and operation of new stores. “While these acquisitions allowed (Mattress Firm) to achieve … presence in markets where they previously had little to no presence, they also led to ‘cannibalization’ of sales amongst stores in close proximity to each other. As a result, many Mattress Firm stores are in direct competition with other Mattress Firm stores, resulting in disappointing sales.”
