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Houston Based Mattress Firm Files for Bankruptcy, Will Close Hundreds of Stores

An initial group of approximately 200 stores are expected to close in the coming days

Houston-based Mattress Firm announced Friday it has filed for Chapter 11 bankruptcy and will close up to 700 stores.
Houston-based Mattress Firm has filed for Chapter 11 bankruptcy and will close up to 700 stores.

Houston-based Mattress Firm announced Friday it has filed for Chapter 11 bankruptcy and will close up to 700 stores. An initial group of approximately 200 stores are expected to be closed in the next few days and decisions about additional store closings will be made in the next few weeks.

Barbara Stewart, professor of retailing and consumer sciences at the University of Houston, said the firm’s aggressive expansion policy may be to blame.

“Here in Houston, we have multiple stores in Katy, on Westheimer, multiple stores in pretty close reach of each other,” she said.

The other challenge, she said, is what many other brick-and-mortar stores are facing: competition from online retail.

Steve Stagner, the company’s executive chairman, president and CEO, said the stores that will close are “in certain markets where we have too many locations in close proximity to each other.”

In conjunction with its prepackaged restructuring plan, Mattress Firm received commitments for approximately $250 million in debtor-in-possession financing, which, subject to Court approval, will be available to support its ongoing operations during the Chapter 11 proceedings.

The company also obtained commitments for $525 million of senior secured credit facilities enabling it to emerge from Chapter 11 and support operations thereafter. Mattress Firm expects to complete the prepackaged restructuring process within the next 45 to 60 days.

Stagner added the company intends to use “the additional liquidity” from the bankruptcy to “open new stores in new markets, and strategically expand in existing markets where we see the greatest opportunities to serve our customers.”

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Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters and the Houston Press Club. Florian is a native of Germany. His studies...

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