National mattress retailer Mattress Firm operates 13 locations in the Midlands across Columbia and Lexington. However, according to the Houston Chronicle, the future of all of the retailer's locations nationwide could be in trouble.
A Houston-based company, Mattress Firm was purchased in 2016 by South African retail conglomerate Steinhoff International for $3.8 billion. According to the Houston Chronicle, "Steinhoff might sell Mattress Firm or close stores as it offloads assets amid allegations of accounting fraud, analysts say."
According to the Chronicle, Steinhoff announced in December plans to "generate cash and temper lenders' concerns by selling at least $1.2 billion in 'non-core' assets" and "its stock market value tanked more than 80 percent after the resignation of its CEO and a warning that it might have to revise past financial statements."
The article goes on to say that while the sale of Mattress Firm stores doesn't appear to be immediately likely, it is a possibility.
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"Wedbush analyst Seth Basham wrote in a note to investors that Mattress Firm, which has for months seen same-store sales decline, will likely continue to struggle as Steinhoff conducts its investigation and looks to sell its assets," the Chronicle article states. "Basham added in an interview that if Steinhoff begins to sell off its core assets, it might first cut ties with Mattress Firm before getting rid of higher-performing retailers in South Africa and Europe, where the company is more firmly established."
Mattress Firm CEO Ken Murphy declined to comment to the Chronicle on the speculation, the Chronicle noted.
Mattress Firm is the largest mattress retailer in the United States. Steinhoff's acquisition of the company was its largest to date. The $3.8 billion purchase price reportedly included more than $1 billion in debt.
UPDATE: After this article published online on The State, the following statement was emailed on behalf of Mattress Firm CEO Ken Murphy: “During an earnings call in March 2016, we announced that we would be optimizing our fleet of stores as part of our strategy to close under-performing and/or duplicative locations following a series of acquisitions of other mattress companies. The store closures have been part of our strategic plan, and are a natural part of the acquisition strategy. At a meeting in mid-December 2017, our executive chairman reiterated this plan, mentioning that we would be closing 200 stores. These are the same stores that we announced in 2016. We want to reiterate two points – any potential closures over the course of the next 18 months are not specific to any geographical market and we continue to open stores in under-penetrated and new markets so that we may best serve the local community and our employees.”