More Mattress Firm locations to close than announced earlier
Mattress Firm plans to close more stores this year than previously announced, but it also intends to open dozens of new locations.
The Houston-based mattress retailer closed 99 stores during the fourth quarter of 2017 and will close another 175 stores in 2018, according the latest quarterly report from its parent company, Steinhoff International.
The 274 store closures are higher than the 200 that Mattress Firm officials announced in December.
However,
plans to add back some new stores. It opened eight new stores during the fourth quarter of 2017 and plans to open 75 new stores in 2018. Mattress Firm, the largest mattress retailer in the U.S., has 3,423 locations nationally, according to Steinhoff.
“Management is focused on optimising its store estate in an effort to right-size the overall estate and reduce the number of underperforming stores,” Steinhoff stated in its report.
Steinhoff International, the South African corporation that acquired Mattress Firm in 2016, is embroiled in an accounting scandal over the validity of its financial statements and the value of some $7 billion in assets.
As Steinhoff International reels from the financial fallout, Mattress Firm is facing its own challenges.
Ken Murphy announced in late January that he will step down after two years as CEO and president of Mattress Firm. Chairman Steve Stagner, who served as the company’s CEO from 2010 to 2016, resumed that role on March 1.
The leadership change came as Mattress Firm’s same-store sales fell 10 percent in the fourth quarter of 2017, largely driven by lower average sales prices and the rebranding of Sleepy’s and Sleep Train stores.
In addition, changes in mattress suppliers have “resulted in gaps in the product range that are being urgently addressed,” Steinhoff stated in its report, adding that online bed-in-a-box companies have gained market share.
Mattress Firm last year severed ties with Tempur Sealy and entered into a five-year partnership with Serta Simmons, the nation’s largest mattress manufacturer.
Steinhoff last year also acquired an 80 percent interest in Sherwood Bedding Co., another U.S.-based manufacturer.
Steinhoff said it takes about 18 months for consumers to adopt new brands.