The bed-in-a-box market might be a great thing for mattress shoppers, but the effects aren’t so great for established brick-and-mortar mattress retail stores. Mattress Firm, once one of the leading mattress stores worldwide, has been hit hard by brands like Casper and Leesa. The company has launched its own line of boxed memory foam mattresses to try and compete, but Mattress Firm still faces a $200 million shortfall thanks to competition from bed-in-a-box startups. Now, in worse news for Mattress Firm and its employees, the company has announced a plan to close over two hundred retail stores throughout the United States. Happy New Year, Mattress Firm employees!
The announcement was made during a recent presentation to Mattress Firm’s parent company, Steinhoff International Holdings. Mattress Firm Chairman Steve Stagner told shareholders the company has already closed close to a hundred stores, but over two hundred more are necessary as part of their “store rationalization” effort to close redundant or underperforming stores:
As a result of putting together 1,500 stores over most recent years through acquisitions, we have recognized that there are approximately 300 underperforming or duplicative stores. Over last year, we’ve already gotten out of about 90 locations.
Over the last decade, Mattress Firm vaulted itself to the top of the retail mattress market through acquiring and smaller stores and merging them into the Mattress Firm brand. The company controls around 20% of the U.S. mattress market and brings in around $3.3 billion in revenue. However, the burgeoning online bed-in-a-box market is projected to double in size and total around 10% of all mattress sales in 2018. Is putting established brands out of business merely an unavoidable consequence of a new business model? Just how streaming video might one day mark the end of the movie theater, the online mattress industry might one day usher in the end of going to a physical mattress store and lying on mattress after mattress to find the right one. Is that such a bad thing? Communicable skin diseases are a real thing, after all. So long, Mattress Firm.