- Mattress Firm has a had a rocky few months.
- Its parent company is being investigated after it discovered “accounting irregularities” in its year-end accounts.
- In December 2017, it announced Mattress Firm would be closing 200 stores. Analysts say we can expect hundreds more to shutter.
It’s been a rocky few months for Mattress Firm.
In December 2017, its parent company, South African retail conglomerate Steinhoff Holdings, delayed publishing its year-end accounts due to “accounting irregularities” and is now being investigated.
Then, in January, a Reddit thread that claimed Mattress Firm’s many locations was a sign it was laundering money went viral.
That same week, CEO Ken Murphy, announced his resignation; the company confirmed he would be leaving in March.
The company has been accused of being overstored in the US, and analysts are sceptical as to whether it can survive the impending threat of mattress startup companies like Casper and Saavta, who offer customers innovative mattress products.
Mattress Firm has 3,400 stores in the US. Its store count grew dramatically in 2015 when it acquired competing chain Sleepy’s.
In December 2017, the company confirmed it would be closing 200 stores. Now analysts say we can expect to see many more shutter.
“Considering the accounting irregularities at Steinhoff and the operational troubles at subsidiary Mattress Firm, we believe there is a high probability that Mattress Firm will close significantly more than 200 stores announced in December,” analysts at Wedbush wrote in a note to investors on Wednesday.
It continued: “Our base case is now 600 store closures in 2018, with potential for as many as 1,000 closures out of the 3,400 store base.”
Mattress Firm did not immediately respond to Business Insider’s request for comment.
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