Mattress Firm files for bankruptcy. Here’s what it means for 10 Treasure Valley stores

Mattress Firm, the nation’s largest bed retailer, filed Friday for Chapter 11 bankruptcy protection and said it will close 200 stores nationwide in the next few days.

A store at 16375 N. Merchant Way in Nampa is listed among those being closed. However, Mattress Firm does not have a shop there. The space is the location of an Aspen Dental office.

Mattress Firm had planned to open a store there, but later changed its mind after construction was delayed to comply with environmental assessments. The owner of the property, Madison Nampa, a Kirkland, Washington, company, filed suit for breach of contract against Mattress Firm in January 2017.

Lawyers for the two companies spent six hours last month with a mediator trying to work out a settlement, but were unable to do so, according to U.S. District Court records.

Mattress Firm — which operates 10 stores in the Treasure Valley — has a store a third of a mile north of the North Merchant Way location, at 16594 Midland Blvd., but it appears it will remain open.

“We haven’t heard anything,” said a clerk who didn’t identify himself. He referred the Idaho Statesman to an area manager, who did not immediately call back.

Altogether, Mattress Firm operates 16 stores in Idaho, including Boise, Meridian, Garden City, Nampa, Twin Falls, Pocatello, Ammon, Coeur d’Alene and Lewiston.

The Houston-based company, which has 3,230 stores in 49 states, said it plans to close as many as 500 more stores before the end of the year. Beds and other merchandise from the stores that are closing will be moved to other locations. Mattress Firm said it will not conduct any liquidation sales.

“Leading up to the holiday shopping season, we will exit up to 700 stores in certain markets where we have too many locations in close proximity to each other,” CEO Steve Stagner said in a statement. “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.”

The company said it will continue to operate as usual online and at stores that aren’t being closed. It said deliveries will continue to be made as scheduled and that it intends to continue honoring warranties and guarantees.

Mattress Firm said it has secured $250 million in financing that will allow it to continue operations and pay suppliers.

The company was founded in 1986. Over the years, it bought out many rivals, including Sleep Country USA, which had stores in Idaho, Oregon and Washington, and Sleep Train, based in California. Three years ago, Mattress Firm paid $780 million for Sleepy’s, a New York retailer with 1,000 stores in the Northeast.

Analysts said Mattress Firm had too many locations and didn’t do enough to keep up with an increasing number of online competitors that offered convenience and more transparent pricing.

In Boise, Mattress Firm has four stores near the Boise Towne Square mall. One at 510 N. Cole Road, is across the street on the east side of the mall. Another, at 675 N. Milwaukee St., is on the west side. That store is a half-mile south of another store on Milwaukee and seven-tenths of a mile from a store at 8600 W. Franklin Road.

The company’s two Garden City stores are nearly across the street from each other, just south of the corner of State and Glenwood streets.

Sales fell 11.2 percent last yer to $3.29 billion, the company said in an investor presentation.

“This is a wake-up call for traditional mattress chains: The 1960s model doesn’t work anymore,” said Bob Phibbs, chief executive of New York-based consultancy the Retail Doctor. “The traditional mattress-buying experience didn’t make people feel like they mattered. It made them feel used.”

He said buying a mattress often felt like buying a used car. Customers weren’t sure how to compare one model to another and the constant sales and promotions left buyers wondering whether they got a good deal.

Last year, Mattress Firm lost a contract with Tempur Sealy International and no longer sells TempurPedic or Sealy beds in its stores.

The bankruptcy filing came days after Amazon.com announced it’s entering the lucrative bed-in-a-box field. Tuft & Needle, Casper and Purple have popularized the concept of selling beds online and allowing buyers to try them out at home. If they don’t like it, they can return it for a refund.

The Washington Post contributed.

This story was originally published October 5, 2018 at 11:09 AM.