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Shining a light on PE ownership.

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MA

Mattress Firm

retail
PE-OWNED

Specialty mattress retailer with stores across the United States.

PE-OWNED

Acquired by Advent International2016-08-11

View PE Firm Profile

What Made It Great

“

Leading mattress specialty retailer with extensive store network and brand partnerships

What PE Will Likely Do

Predictions

Mattress Firm will experience significant store closures, reducing customer access to their products

HIGH LIKELIHOODBased on: Advent International's track record of cost-cutting and financial engineering in acquired companies, with a 50% bankruptcy rate

Mattress quality and construction will likely degrade, with cheaper foam, thinner coils, and lower thread counts used in new mattresses

HIGH LIKELIHOODBased on: The common private equity tactics used in the retail industry, including debt loading, dividend recapitalizations, store closures, inventory reductions, and deferred maintenance

Mattress warranties and customer service will likely be reduced or scaled back

HIGH LIKELIHOODBased on: Mattress Firm's position as a specialty retailer, which makes it vulnerable to the typical private equity playbook

Mattress inventory levels will be cut, leading to fewer options and less product availability for customers

HIGH LIKELIHOODBased on: Mattress Firm's position as a specialty retailer, which makes it vulnerable to the typical private equity playbook

Expected Timeline

Phases
0-6 monthsCompleted

“0 to 6 months months”

Announcements about 'transformation' and 'optimization' of the Mattress Firm business model

6-12 monthsYOU ARE HERE

“6 to 12 months months”

First round of store closures, along with staff reductions, announced

12-24 months

“12 to 24 months months”

Noticeable decline in overall mattress quality and selection, with fewer high-end options available

24-48 months

“24 to 48 months months”

Bankruptcy rumors begin to circulate, leading to more aggressive cost-cutting measures that further degrade the customer experience

48-60 months

“48 to 60 months months”

Potential bankruptcy, restructuring, or fire sale of Mattress Firm assets

Similar Cases

Other companies that followed a similar path after PE acquisition

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Bankruptcy

Sports Authority

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Operating

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Joann

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What You Can Do

Take Action

Actions

  • Consider alternative mattress providers that are not owned by private equity firms, as they may offer more stable and higher-quality products

  • Be cautious about purchasing new mattresses from Mattress Firm in the coming years, as the quality and warranty terms are likely to degrade

  • Monitor Mattress Firm's store closures and product changes, and be prepared to seek alternative options if the customer experience significantly declines

Alternatives

CostcoSAFE

Employee-owned warehouse retailer

TargetSAFE

Publicly traded retailer with strong values

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"Mattress Firm is now PE-owned. Here's what that means for you."