Published: Sun, October 07, 2018
Economy | By

Merced retail store to close following corporate bankruptcy

Merced retail store to close following corporate bankruptcy

That's why Mattress Firm, America's largest bed store, has filed for bankruptcy.

A mattress store with three locations in the Lansing area is filing for bankruptcy, and one of those locations is being closed.

The restructuring of the largest U.S. mattress retailer comes as its parent Steinhoff fights for survival after revealing multi-billion euro holes in its balance sheet that wiped more than 90% off its market value and forced it to sell assets to fund working capital.

The Houston-based retailer will begin to close roughly 200 stores in the coming days.

The company hasn't yet identified which stores it will close, including any in Wichita.

"While these acquisitions allowed (Mattress Firm) to achieve ... presence in markets where they previously had little to no presence, they also led to "cannibalization" of sales amongst stores in close proximity to each other", the company said. Beds and other merchandise from the stores that are closing will be moved to other locations. It owes its largest creditor, mattress maker Simmons Manufacturing Co., almost $65 million.

The filing, which was expected for days, will help the company trim its crippling debt and fortify its balance sheet.

Like many retailers, the 32-year-old chain has struggled with over expansion, including its purchase of Sleepy's in 2016 and Mattress Giant in 2012.

The company, founded in 1986, has sales of more than $3 billion.

FILE -Mattresses are offered for sale at a Mattress Firm store on December 6, 2017 in Chicago, Illinois.

Its parent company, Steinhoff International, is dealing with major problems including accounting irregularities forcing its CEO to resign in December 2017. That left the retailer with less product and employees who now had to promote and sell Serta Simmons mattresses after years of promoting Tempur Sealy.

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