Having been reduced to 180 stores in Texas and Florida, namesake-only sold off the remaining pieces of its portfolio this week to rival in a $47 million deal. Mattress Firm then announced that, as a result, it has become the nation’s largest specialty bedding retailer. To boot, it’s quickly rebranding the newly purchased Mattress Giant stores under the Mattress Firm banner and replacing products sold across the Mattress Giant chain with its own items.
Headquartered in the North Dallas suburb of Addison, Texas, Mattress Giant had big plans. The retailer put down roots in 1992, in a decade that saw noteworthy rises in real estate prices nationwide that enticed homeowners to with no fewer than five bedrooms. Mattress Giant grew busy expanding its business selling mattresses, futons, daybeds, and pillows from its base in Texas to Florida, Georgia, Missouri, Illinois, and Minnesota. At its peak, the company cast a wide shadow over some bedding rivals with a network of 300 US stores. Private equity firm , also a middle-market investor, bought the company in 2006.
Mattress Giant lost its footing in recent years, however. Beginning in 2008, consumers put off purchasing bedding and other high-dollar items as the housing market slowed to a halt and the number of foreclosures rose. As a result, Mattress Giant looked for cash to stay afloat as it rode out the recession. It sold off the assets of 55 of its stores in four states to competitor Mattress Firm, who at the time had more than twice as many stores that it either owned or franchised. As part of the $8 million cash deal, Mattress Firm also picked up three distribution centers. New York’s bedding chain also benefitted from Mattress Giant being cash-strapped. It picked up 67 stores.
After consuming the remainder of the Mattress Giant operations this week, Mattress Firm operates more than 200 stores in Texas. I anticipate the company will soon shutter underperforming locations in the Lone Star State under both the Mattress Firm and Mattress Giant banners. Alert to wide-eyed retailing entrepreneurs — like the successful trio of buddies who founded Mattress Firm — be on the lookout this year for a good deal on strip mall real estate in Texas.