Is Mattress Firm on the verge of going out of business?
Mattress Firm’s owner “Steinhoff” is having a very difficult time managing their finances. Their stock has dropped 80% in the past week. It appears that they may have a crisis on their hands that ultimately puts the end to Mattress Firm. Last year Mattress Firm had an annual loss of $111 Million. This year it is expected to be worse. Steinhoff is out of money and can no longer carry the load. It is extremely interesting to see where this goes!
UPDATE (May 24, 2018)
Steinhoff International stock now down to .10 Euros
Mattress Firm meanwhile has increased their advertising efforts. This Memorial day they are giving away adjustable beds with mattress purchase. (Their low end mattress “Tulo” is priced around $600 in queen. That means that you can get an adjustable base (head up only) and mattress for around $600). Not bad since both items together costs M.F. around $300. In the long run however, the customers will be throwing that stuff in the trash in about three years and M.F. will be gone. Lose/Lose
UPDATE (December 28, 2017)
Things are moving fast for Steinhoff and Mattress Firm.
Steinhoff’s stock has dropped 90% this month and is now being rated as “Junk” (According to Moody’s Investor Services)
Meanwhile Mattress Firm is publicly stating that they have solved all their problems. They are closing 200 of their 3500 stores. They claim that if someone will only loan them $200 Million, they can make it through the next year and somehow miraculously start making a profit for the first time within 5 years. (They did manage to borrow $75 Million against property holdings). This should get them through this coming year but as we know, a business cannot keep losing money and survive.