Purchase by Steinhoff and bankruptcy
In August 2016, Steinhoff announced it would purchase Mattress Firm for $3.8 billion, taking the company private[26] and creating the world's largest mattress retail distribution company in the world. At this time, the company had 3,500 stores and 80 distribution centers in 48 states.[27][28] Steinhoff consolidated its mattress stores under one name. In 2017, the company converted its Sleep Train and Sleepy's locations to the Mattress Firm name.[29][30][31]
In January 2017, Steinhoff attempted to renegotiate Mattress Firm's contract with Tempur-Sealy International. However, this ended in Tempur-Sealy terminating the contract[32] and Mattress Firm signing with Serta Simmons instead. Soon after, Tempur-Pedic filed a lawsuit accusing Mattress Firm of selling unauthorized mattresses. In August 2018, it filed another lawsuit accusing the firm of selling copies of Tempur-Pedic products under the lookalike "Therapedic" brand.[33] The lawsuit was settled in February 2019, followed by the resignation of Mattress Firm CEO and Executive Chairman Steve Stagner in April.[34] It wasn't until June 2019 that the two sides reconciled and signed a new contract.[35]
By 2018, the company was the top mattress seller in the industry, yet was seeing declining sales due to competition from online retailers and the loss of revenue from Tempur-Sealy. Another issue was over-expansion. At this point, Mattress Firm had more stores than Big Lots, Michaels, and Williams-Sonoma combined, and three times as much the market share as its competitors.[36] In March 2019, an independent investigation found that from 2009 to 2017 Steinhoff had recorded fictitious or irregular transactions amounting to roughly €6.5 billion. The investigations state that Jooste and other senior executives “made or published statements … that they knew or ought reasonably to have known were false, misleading or deceptive. In March 2024 the South African regulator Financial Sector Conduct Authority (FSCA) fined Jooste R475 million for publishing false or misleading financial statements.Executives, especially Jooste, were able to act with little oversight. Board members and auditors failed to detect—or ignored—red flags. According to forensic reports, some directors signed off on misleading financials without adequate scrutiny. The ultimate cause of Steinhoff International’s downfall was a massive and sustained accounting fraud orchestrated by senior leadership, including former CEO Markus Jooste. This fraud involved fictitious transactions, inflated profits, and false asset values, which significantly overstated the company’s financial health over nearly a decade (2009–2017).
Much of the problem also stemmed from a long-standing real estate scandal at Mattress Firm, where lease agreements for store locations had been inflated.[37] In October 2017, the company filed a lawsuit against two of its real-estate and construction executives, accusing them of taking bribes to sign above-market leases on behalf of the company.[38]
The cancellation of the company's supply agreement with Sealy, plus the costs in litigations and branding that followed, resulted in the firm missing its sales goals by a substantial margin. At the same time, Steinhoff faced its own accounting scandal that saw the conglomerate inflate income and hide the financial situation at Mattress Firm. Steinhoff eventually took a $1.9 billion write down on company.[36][37][38]
On October 5, 2018, Mattress Firm filed for Chapter 11 bankruptcy.[39] The company closed 200 unprofitable stores after paying the landlords.[39][40] In November 2018, Mattress Firm emerged from Chapter 11 bankruptcy after closing 700 stores nationwide and emerged healthy 47 days later.[41][42]
In 2019, Mattress Firm appointed John Eck as CEO[43] and in March 2020, Mattress Firm was one of several retailers to announce it would not pay some or all of its rent in April due to the effects of COVID-19.[44] In September 2021, the company filed for a confidential IPO.[45] It officially filed an IPO in January 2022, but ultimately withdrew the offering a year later.[26][46]
In 2023, the company announced it would move its headquarters to Westchase, Houston as the lease at its current headquarters ends.[47] In August 2024, Mattress Firm announced a partnership with DoorDash to provide two-hour delivery from its stores.[48]
