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Mattress Firm files for bankruptcy, will shutter up to 700 stores

Mattress Firm Holding Corp. has filed for chapter 11 bankruptcy, the specialty mattress store announced on Oct. 5.

As part of a 45- to 60-day restructuring plan, Steinhoff International Holdings NV-owned Mattress Firm will close up to 700 stores, with an initial round of 200 stores to close "in the next few days." Decisions on additional store closings will be made in the next few weeks, the company said.

"We intend to use the additional liquidity from these actions to improve our product offering, provide greater value to our customers, open new stores in new markets, and strategically expand in existing markets where we see the greatest opportunities to serve our customers," said Executive Chairman, President and CEO of Mattress Firm Steve Stagner in a company news release.

Kite Realty Group Trust reported the highest REIT exposure to Mattress Firm with 22 stores leased to banners owned by the Mattress Firm holding company — Mattress Firm and Sleepy's. That represents 1.1% of the real estate company's total annualized rent as of June 30, according to an Aug. 8 S&P Global Market Intelligence analysis.

Mattress Firm plans to restructure with the help of $525 million in senior secured credit facilities and $250 million in debtor-in-possession financing. The mattress-seller has a total debt of $1.36 billion, according to S&P Global Market Intelligence.

The company also plans to repay all of its suppliers and contractors in-full and under normal terms. Mattress Firm said it will remain the largest specialty mattress retailer in the U.S.

Simmons Manufacturing Co. Inc. with $64.7 million and Serta Restokraft Mattress Co. Inc. with $25.5 million are Mattress Firm's largest creditors, according to Mattress Firm's chapter 11 filing.

Sidley Austin LLP is Mattress Firm's legal counsel and AlixPartners LLP is the financial adviser. Guggenheim Securities LLC will be the restructuring adviser.