According to CNBC, sources close to Mattress Firm report that the retail giant may file for bankruptcy as it looks to restructure its debts and improve its position in the marketplace.
The news surfaced this week, with CNBC reporting that Mattress Firm is exploring options within the bankruptcy court system as it considers shuttering over 3,000 poor-performing outlets across the United States. If the reports are accurate, this will make Mattress Firm one of many storefront mattress retailers to feel pressure under competition from online retailers. The move comes less than two years after Mattress Firm was acquired by South African parent company Steinhoff for nearly $4 billion.
Both companies are reportedly partnering with financial consulting firm AlixPartners in an effort to fully understand their options and possibly create the foundation for a bankruptcy filing. According to analysts at asset management firm Piper Jaffray Companies, a successful bid will allow Mattress Firm to reorient its real estate holdings and increase liquidity throughout the organization. I reached out to Mattress Firm in an effort to understand more about this strategy, but they declined to comment.
EXPANDING FROM CLICKS TO BRICKS
Meanwhile, as Mattress Firm looks for ways to cut its brick-and-mortar operations, some online-only retailers have found ways to move into storefront locations. Earlier this year, online bedding company Purple extended its reach into dozens of Mattress Firm locations in Chicago and San Francisco, while Parachute and Casper recently opened up shops in New York City. Each company maintains a large online presence but opened physical stores to allow customers to test the products before buying them.
Though more and more mattress retailers are combining e-commerce with brick-and-mortar business, Mattress Firm has yet to announce any plans to expand its online presence. According to the CNBC report, people familiar with Mattress Firm’s bankruptcy deliberations wish to remain anonymous, but have apparently stated that Mattress Firm has not come to any definitive conclusions and is still talking strategy.
Image courtesy of @MattressFirm on Facebook