Mattress Firm trimmed from 3,500 to 2,600 stores in a 46-day Chapter 11, then sold for $4B

Mattress Firm reached roughly 3,500 US stores through rapid acquisitions, frequently opening multiple outlets within sight of each other on the same street. In 2016 South Africa's Steinhoff International bought the chain for $3.8 billion, but two years later Steinhoff was consumed by an accounting scandal, and the retailer's own economics were collapsing as online brands such as Casper sold mattresses with little markup. CEO Steve Stagner described the problem bluntly: the company's growth had produced duplicative stores in many markets.

On October 5, 2018 the company filed a prepackaged Chapter 11 in Delaware. The decisive move was sequencing: before filing, it secured $250 million of debtor-in-possession financing and commitments for $525 million of exit facilities, and lined up creditor support for a plan ready to be confirmed on entry. Inside the case it moved to reject up to 700 leases and closed roughly 200 stores within days, with all trade creditors paid in full so inventory kept flowing into the holiday season.

Mattress Firm emerged on November 21, 2018, 46 days after filing, with about 2,600 stores and an undrawn $125 million revolver. The smaller chain stayed the country's largest mattress retailer, and in May 2023 Tempur Sealy signed a definitive agreement to acquire it for approximately $4.0 billion in cash and stock.

Emerged in 46 days with $525M of exit financing and 2,600 stores; five years later Tempur Sealy agreed to buy the chain at a $4.0B enterprise value.

The footprint, not the brand, was broken: management said unprecedented growth had led to duplicative store locations, and Chapter 11 let it reject leases no landlord would voluntarily renegotiate.

Prepackaging moved the risk before the filing: creditor votes, $250M of DIP financing and $525M of exit facilities were arranged before day one, so the court only had to confirm a ready plan.

Trade creditors were unimpaired and paid in full, which kept shelves stocked through the holiday quarter and removed the supplier panic that kills most retail bankruptcies.

Speed protected commercial value: a 46-day stay was too short for the brand to become liquidation merchandise in shoppers' eyes.

A prepackaged bankruptcy can be the fastest way to shrink an oversaturated footprint: line up creditors and DIP financing before filing, and court protection costs weeks, not years.

Tempur Sealy completed the acquisition on February 5, 2025, after an FTC review that required divesting 73 Mattress Firm locations plus the Sleep Outfitters subsidiary to Mattress Warehouse. Tempur Sealy renamed itself Somnigroup International and now trades as SGI. The chain that filed in 2018 with 3,500 stores joined a vertically integrated bedding group at roughly 2,300 locations and over 6,200 sales associates.