Mattress Firm, the biggest retailer of mattresses throughout the United States, including Massachusetts, recently determined that its dire financial straits required serious attention. It has thus decided to file for Chapter 11 bankruptcy. The bankruptcy comes as the firm’s corporate parent attempts to navigate an accounting-related scandal in addition to dealing with the company’s burdensome store footprint.
Mattress Firm has more than 3,000 stores nationwide, as at one point in time having a large number of mattress stores was viewed as a wise strategy, financially. These stores are generally not expensive to operate, and in the past, they did not face much price competition with their mattresses. However, new industry entrants include online retailers such as Casper, whose sales strategies enables them to sell these products with little or no markup.
Thanks to the growth of online mattress companies, Mattress Firm’s pricing umbrella is now collapsing. However, the chief executive officer of Mattress Firm said that his company will eliminate 700 stores located in markets where too many of them are too close to one another. Bankruptcy is a tool that many retailers use to quickly get out of leases that are no longer economically feasible.
Sometimes businesses in Massachusetts and elsewhere struggle to overcome unmanageable liabilities. In these situations, they may benefit from seeking Chapter 11 bankruptcy protection, which can put them on the path to financial freedom and essentially gives them a second chance to thrive long term. An attorney can provide struggling business owners with the guidance they need to confidently complete the bankruptcy filing process in the Bay State.