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The Houston-based company, which was founded in 1986, is probably the largest omnichannel mattress specialty retailer in the U.S., based on revenue. As of September 2021, it had 2,353 retail stores across the country and operates the digital platforms MattressFirm.com and Sleep.com. Features like MattressMatcher, an AI-supported tool that allows customers to compare products, give it an edge over rivals.
Return to Market
Interestingly, Mattress Firm is seeking stock market listing around six years after it was taken private by South African furniture retailer Steinhoff, which acquired a majority stake in the company in 2016. But the transaction didn’t help in improving its financial position as Steinhoff was heavily indebted and involved in multiple legal issues. At one point, Mattress Firm filed for bankruptcy protection and was forced to close hundreds of stores, but it managed to avoid a collapse and got back on track. The high debt is the primary challenge facing the comapny.
Cause for Concern
Also, the business continues to be affected by pandemic-related headwinds, though the recent sales slump looks temporary because it was caused mostly by the postponement of orders, not cancellations. Despite the booming housing market, Mattress Frim’s sales might come under pressure from the weak consumer sentiment and COVID-related restrictions in the near term.
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Meanwhile. the management is working on various initiatives to transform the business by capitalizing on growth opportunities and capturing market share. They include streamlining the store footprint, revising product assortment, digital push, and realigning the cost structure.
Mixed 2020
In fiscal 2020, total revenues increased 35% to $4.4 billion, exceeding the growth of the broad industry. Comparable sales rose 36.1% during the year, reflecting a marked increase in the volume of units sold and average order value. Mattress Firm incurred a loss of $165.1 million vs. a profit of $125.6 million in fiscal 2019.