With more than 3,300 stores in the United States, Mattress Firm announced on Friday that it has filed for bankruptcy.
Shopping for mattresses was once exclusive to a brick and mortar store shopping experience. However, the proliferation of online reviews has made it more popular for consumers to simply order mattresses over the internet, driving stores like Mattress Firm out of business. In Friday’s announcement, CEO Steve Stagner said that Mattress Firm will immediately close 200 underperforming stores and will look at 500 additional stores in the coming weeks to determine their fates.
The mattress giant has a plan in place that will enable it to exit bankruptcy in approximately two months. As is often the case with bankruptcy filings of this size, the company hopes to use the liquidity gained from the decision to expand to more favorable markets while closing down those stores that have not fared as well.
Mattress Firm has been in business for 32 years but has recently experienced a sharp drop in sales, in large part due to the expansion of internet mattress sales. Mass online retailer Amazon and mattress firm Casper have been the largest competition to Mattress Firm as it has also struggled with the problem of expanding its own storefronts too quickly. With Casper and other online retailers offering convenient delivery in a box, it makes it harder than ever for traditional storefronts to compete.
Specialty mattress company Casper plans to expand its operation by adding 200 storefronts in the U.S. over the course of the next three years. Amazon will continue to challenge the retailers in this market as it continues to promote its in-house mattress name. The Amazon foam mattresses are offered to consumers for a fraction of the cost of many of the other players in this market space. Throw in free shipping and it is hard for other retailers to beat the deals offered by Amazon.