HOUSTON — Mattress Firm, the nation’s leading specialty mattress retailer, filed for bankruptcy Friday.
The company filed for Chapter 11 bankruptcy protection in an attempt to strengthen its balance sheet and optimize its store footprint.
Mattress Firm plans to close up to 700 stores where they have several locations in close proximity to each other. About 200 stores are expected to close in the next few days. It currently has more than 3,300 stores in the United States.
In conjunction with its prepackaged restructuring plan, Mattress Firm has secured about $250 million in debtor-in-possession financing, which will be available to support its ongoing operations during the Chapter 11 proceedings subject to Court approval.
“We will continue to provide unmatched value to our customers by offering the best quality beds at prices that fit any budget today, tomorrow and into the future,” said CEO Steve Stagner.
Like many retailers, the 32-year-old chain has struggled with over expansion, including its purchase of Sleepy’s in 2016 and Mattress Giant in 2012. The company has many stores in close proximity to one another, cannibalizing sales. It’s also grappling with increasing competition from online retailers, including Casper and Amazon.
Its parent company, Steinhoff International, is dealing with major problems including accounting irregularities forcing its CEO to resign in December 2017.
Mattress Firm expects to complete the prepackaged restructuring process within the next 45 to 60 days. It hopes that the liquidity gained from the bankruptcy allows it to expand into more favorable markets and even open some new stores in existing markets.
Associated Press and CNN contributed to this report.