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More Mattress Firm store closings coming, but business has stabilized despite price increases, CEO says

·5 min read

For several years, Mattress Firm has been having a nightmare.

In 2017, the company had a falling out with key supplier Tempur-Sealy that temporarily removed the popular Tempur-Pedic beds from its stores.

In 2018, Mattress Firm filed for Chapter 11 bankruptcy protection after years of overexpansion and closed about 700 stores while grappling with a financial scandal at its parent company and intense competition.

Then, in 2019, its CEO resigned abruptly as the company sought to patch up its rocky relationship with Tempur-Sealy.

Finally, in 2020, the pandemic forced the retailer to close its locations temporarily.

But the nightmare may be coming to an end. Mattress sales rebounded quickly following the early months of the pandemic as Americans plunged stimulus checks into home goods instead of travel and dining.

Working from home, in your bed?: You're not alone. Mattress sales are soaring during the pandemic.

Tempur-Cloud debuts: Tempur-Pedic introduces bed-in-a-box mattress

Former General Electric executive John Eck, who took over as CEO in May 2019, said the retailer’s outlook has improved considerably. He spoke recently to USA TODAY’s Nathan Bomey. These excerpts of the conversation have been edited for length and clarity:

Question: The company experienced quite a lot of turmoil, a lot of store closures. Where do things stand today? And how do you feel about your store footprint right now?

John Eck: We’ve got 2,400 high-performing (stores) in 49 different states. We’ll continue fine-tuning and optimizing the footprint as we go forward.

The whole organization has performed incredibly well over the last 15-16 months. The pandemic has been a galvanizing event for the team, and we're very proud of what we've accomplished.

Q: About 700 or so were closed during the bankruptcy, is that about right?

Eck: That's correct.

Q: And so you feel pretty stable at that point? Or are you still looking to pare down?

Eck: No, there's further optimization to be done. There will be more stores that get closed.

Q: How many?

Eck: We’ll close some every year, we'll open some every year, but (we plan to have about) 2,400 to 2,600.

Q: How is inflation affecting the consumer and therefore demand for your business and your prices?

Eck: We're the largest purchaser of mattress products in this country, so we work very closely with all of our strategic partners and suppliers, trying to manage through price increases.

There has been upward pressure on the components of what goes into a mattress. And supply has been tight in some cases. There's been a few products that have had price increases, and there really hasn't been any change in demand for the sleep products that we offer.

Q: Is there a concern that inflation could start to be a real issue?

Eck: There's a wide belief that things will settle down in the fourth quarter in terms of supply chains returning to normal. So I’m not an economist, but I don't see it as a long-term concern.

Q: We reported that a shortage of foam is affecting the automotive industry. How is that affecting you?

Eck: The foam disruption was actually driven by the freeze in February here in Texas.

Things got out of whack for a little while, but we're largely through that particular issue.

Q: So much of the conversation in your industry over the last several years has been about the tug of war between the digital sellers and physical retailers and the question of how fast will sales transition to that bed-in-box model? Or will it? It seems like the pandemic probably accelerated that transition, but physical sales are still the majority. So how do you assess the state of digital versus physical retail sales of mattresses right now?

Eck: Most of the mattress-in-a-box companies realize that in order to win long term, you've got to be in physical (stores). We have the most showrooms in the country.

Q: But does that mean that you need to have discussions with additional bed-in-a-box companies like, say, Casper or Lisa about carrying those in your stores?

Eck: We look for really differentiated products. We will always be fine-tuning what we offer and offer the best array of technologies and solutions and the best brands. But we feel pretty good about where we're at right now.

Q: What percentage of your sales now are in-person versus online?

Eck: More than 90% of our sales are in brick and mortar. We believe that our stores are an essential part of a customer's journey. More than 80% of people want to try this product before they buy it.

Q: One of the critiques of the mattress industry is that it's very difficult to cross-shop – that even the names of mattresses can be different from store to store. What are you doing to smooth out that shopping experience? Or is it not a concern for you?

Eck: I realize that it's complicated because there are multiple brands or multiple technologies. We want to be an honest broker.

We have launched, as of early May, an offering online and in-store called the ‘MattressMatcher’ to identify your sleep disrupters and how you sleep, where you might have discomfort (and) what your goals are in terms of sleep and health in general. Our goal is to find the mattress that matches you.

So we're trying to create navigation tools to simplify your customer journey.

You can follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey and subscribe to our free Daily Money newsletter here for personal finance tips and business news every Monday through Friday morning.

This article originally appeared on USA TODAY: Mattress Firm store closings: More coming but CEO hails rebound