Tempur Sealy, the marker of TempurPedic mattresses and other bedding products, is tanking on Monday after failing to reach a deal with a key retailer.
Temper Sealy said that it had terminated its business with Mattress Firm over a contract dispute. Tempur Sealy said in a release on Monday morning that Mattress Firm informed the company that the contract between the two would be terminated if there weren’t “significant economic concessions.”
“Over the course of the week, we conducted discussions with representatives of Mattress Firm and Steinhoff, and we considered their request for a significant change in economic terms,” said Tempur Sealy CEO Scott Thompson. “Ultimately, we concluded that it was in the long-term interest of all of our stakeholders to terminate our contracts with Mattress Firm. This enables us to immediately reorient our employees and resources to support retail partners that exhibit a long-term commitment to Tempur Sealy’s brands.”
According to Reuters, Mattress Firm made up 21% of Tempur Sealy’s sales in 2016.
Following the news, shares of Tempur Sealy fell just over 27% in pre-market trading as of 8:00 a.m. ET.