It’s official. Mattress Firm announced Friday that it has filed for Chapter 11 bankruptcy protection.
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The announcement comes after many outlets reported for months the mattress retailer was prepping to file.
As part of its restructuring plan, Mattress Firm could close as many as 700 of its 3,400 locations leading up the holiday shopping season. The company said 200 of those locations are expected to close in the next few days.
Steve Stagner, CEO of Mattress Firm, said its new plan will allow them to strengthen its "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,” Stagner said in a statement.
Overall, it has been a rocky few years for the Houston-based mattress chain. Last October, the company filed a lawsuit against two of its former employees, a broker and a group of developers who they claimed conspired to push the company to aggressively expand and open stores. A few months later it had to close 200 stores, while its parent company, Steinhoff Holding, was being investigated for delaying its year-end accounts due to “accounting irregularities.”
Then in January of this year, a Reddit thread accused several of Mattress Firm’s locations of laundering money. Mattress Firm has denied those allegations. However, that same month, company CEO Ken Murphy announced his resignation.
Additionally, the chain has increasingly come under pressure by a slew of new mattress startups, including Casper and Avocado Green. Further, Amazon announced earlier this month that is now selling its own mattresses.