Friday, October 5, 2018

[UPDATE] Mattress Firm to Shutter 200 Stores, Five in Georgia

Bankrupt mattress retailer Mattress Firm Friday announced the first 200 of what could ultimately be 700 store closures as it works to trim its breath-taking number of stores and remain a going concern.  The first closures include 35 in its home state of Texas, 29 in Illinois and the balance in other markets in which the company operates.  In Georgia - where Mattress Firm seems to operate multiple stores across from, down the road from or otherwise on top of other Mattress Firm stores - the retailer only plans to close five stores.  Amazingly, the stores slated for closure in Georgia include no stores inside the perimeter and only two in metro Atlanta.  Overall, the company operates about 3,500 stores nationwide.  

In metro Atlanta, Mattress Firm plans to close a freestanding store at 1290 Johnson Ferry Road in Marietta (East Cobb) and another at 7601 North Point Parkway in an outparcel of Mansell Crossing, not far from North Point Mall.  According to real estate records, the Marietta and Alpharetta stores are 5,444 and 6,500 square feet, respectively.  

The other Georgia stores slated for closure are in Augusta, Dalton and Macon.  The Augusta store is  located at 2907 Washington Road in Washington Crossing.  The center has been hit hard by closures with anchor Whole Foods Market having closed in early 2017 after opening in 2014.  More recently, an outparcel location of PDQ, a quick-serve chicken restaurant, closed last December after opening in 2016.  The Mattress Firm in the center is the smallest of the Georgia stores slated for closure, occupying a 3,484 endcap space adjacent to Menchie's.  

The Dalton store slated for closure is located just off I-75 at 3045 North Dug Gap Road in a 10,000 square foot freestanding building previously home to a Rooms to Go Express.   The Macon Mattress Firm is located at 4696 Log Cabin Drive and reportedly occupies 4,500 square feet in a freestanding building it shares with Aaron's. 

"To facilitate the store optimization plan, the Company has filed motions with the court seeking authority to reject up to 700 leases. An initial group of approximately 200 stores are expected to be closed in the next few days.  Decisions about additional store closings will be made in the next few weeks." 

"Mattress Firm is implementing a plan to strengthen our business while maintaining our leadership in all of our markets in America. Part of our plan to better serve you includes closing stores that are not performing up to expectations or are situated in areas where we have too many nearby locations. We’re also excited to open new stores in areas where we see opportunities. And rest assured, you’re likely still a quick drive away from your local Mattress Firm."

Mattress Firm is not planning "going out of business" sales at closing locations, instead they hired Gordon Brothers to move in-stock merchandise to locations next door across the street down the road nearby.  A source close to the retailer told ToNeTo Atlanta that the stores slated for closure are likely to cease operations within seven days from today.

In August, Atlanta-based Serta Simmons Bedding merged with direct-to-consumer mattress company Tuft & Needle.  The deal is one of the first to combine a legacy mattress company with one of the upstart online brands that has infiltrated the industry over the past few years. Phoenix-based Tuft & Needle launched in 2012, and like peers Casper and Leesa, among others, sells foam mattresses direct to consumers that arrive to buyers in a box and then expand upon removal from the box.

A report Wednesday in the New York Post claimed that Serta Simmons owner Advent International, a Boston buyout firm, was recently in talks to acquire Mattress Firm but that the two sides could not agree on price.  

For nearly a year now, the company has also been embroiled in a legal spat with two of its former real estate directors and an Atlanta-based commercial real estate agent.   

The popularity of direct to consumer or B2C (Business to Consumer) mattress brands has been a growing problem for Mattress Firm and its standard brick & mortar retail business.  
Inside the Casper Sleep Store at Ponce City Market

In addition, B2C brands like Casper have opened retail stores or have partnered with retailers to offer their products in existing stores.  

Casper opened their second Atlanta area "Sleep Store" earlier today at Lenox Square in Buckhead.  The company's first ever retail store opened this past October along North Avenue at Ponce City Market.  In August, the company revealed its plans to open as many as 200 retail stores in the years to come.  

Williams-Sonoma has partnered with Leesa and offers its mattresses in its Pottery Barn and west elm stores as well as on their respective websites.  Neither store stocks mattresses, though, and one must still wait about a week for their mattress to be delivered to their home.  

What would you like to see open in the two soon to be vacant Atlanta area Mattress Firm stores?  Where did you buy your last mattress?  Have you been to either of Casper's Sleep Stores in Atlanta?

Please share your thoughts below.  


Anonymous said...

Sorry, but ANY retailer that has spent the last 10 years and hundreds of millions of dollars buying other retailers definitely deserves a Darwin Award.

Unknown said...

So the "Mattress Factory District" on Moreland will survive. Bizarre.

Unknown said...

So neither of the ones closing are the ones across the street from each other on Moreland Ave? Bad management personified.

CloseOTP said...

I'm sure part of the decision has to do with ability to get out of a lease. Running these stores are cheap so if 75%+ of the cost is rent, it may make sense to just leave the stores open. Just my guess...

Anonymous said...

Some of the soon to be empty Mattress Firms (UTBAMF) might make great Pizza Huts.

Anonymous said...

The current status is that MF's bankruptcy facilitator is contacting all the landlords trying to get them to agree to slash the rents for fear of them rejecting their lease. After that step, they'll review the Leases where the Landlord's refused to lower the rent and decide whether or not to add those to the rejected lease list...

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