Since 2017, over two dozen U.S. retailers have filed bankruptcy. Now, Mattress Firm joins their ranks. The brick-and-mortar mattress retailer is pursuing Chapter 11 bankruptcy and plans to close hundreds of stores across the nation, and some California locations are likely to be affected.
Mattress Firm's stores are relatively cheap to run, so the company ended up expanding to its current size of approximately 3,500 stores nationwide. However, buying a new mattress in a physical store is not as lucrative as it once was. Competing online brands can operate with even lower overhead, and consumers are apparently more drawn toward online shopping. The store also lost business when Tempy Sealy International -- its preferred mattress brand -- pulled all of its products over a dispute around pricing.
As part of its bankruptcy, Mattress Firm will be able to remove itself from unwanted leases. Around 700 stores are currently on the chopping block. Steven Stagner -- the company's CEO -- says that the closing locations will largely be ones that are already located near other Mattress Firm stores where the company oversaturated the market with its own products.
Employees will still be paid during the bankruptcy process, and customers can expect current programs and policies to continue uninterrupted. The closing of extraneous stores as allowed by Chapter 11 bankruptcy is intended to help Mattress Firm get back on track financially. Bankruptcy can be helpful for California businesses that are struggling to maintain their financial well-being, and the ability to stay open during the process can keep companies in good favor with customers.