Is Mattress Firm A Front For A Large
Mattress Firm stores are everywhere.
Its not uncommon to see two or three in the same shopping center, sometimes even across the street from one another. And not just two different mattress stores to promote competition, but the same exact store: Mattress Firm.
On top of how many Mattress Firm stores there seems to be, there are also all the other brick-and-mortar mattress companies out there, such as Mattress World and BedMart.
In fact, there are currently more mattress stores than McDonaldsor Starbucksin the United States, most of which are Mattress Firms, according to USA Today.
Illustrating this point, 42.6% of Mattress Firm stores are within a one-mile radius of one another, according toBusiness Insider.
The average American only buys a new mattress every seven to 10 years. Plus, most millennials are having their mattresses delivered straight to their doors with bed-in-a-box services, according to USA Today.
So why are there so many Mattress Firms?
A conspiracy theory recently went viral on Reddit after a user suggested that Mattress Firm was a front for a large scale money laundering scheme. How could a company with such a slow-moving product manage to keep so many stores open, many Reddit users wondered.
Mattress Firm is some sort of giant money laundering scheme, one user wrote. I remember seeing four Mattress Firms all on each corner of an intersection once, and there is no way there is such a demand for mattresses.
But whats really going on?
Why There Are So Many Online Mattress Brands
There are about 175 online bed-in-a-box companies in business. Why so many?
The reasons are similar to why there are so many physical stores. Online companies have little overhead costs and high profit margins. The technology that rolls the mattresses up into smaller boxes also makes them cheaper to ship.
Many mattress companies don’t manufacture their beds themselves. The process is outsourced, which brings costs down. So, it doesn’t take too much to start an online mattress company.
Are We In A Mattress
Youve seen them everywhere! and often clustered together, as if central planners across America decided that what every city really needs is a Mattress District. There are now dozens of online rivals too. Why are there so many stores selling something we buy so rarely?
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People Want To Touch Them
You may know someone who ordered their mattress online. Companies like Casper and Leesa are popping up left and right, hoping to cut the middleman out of mattress selling and offer mattress-in-a-box offerings at cheaper prices.
But like a few other things, mattresses are a hard sell for the internet. People like to touch them and test them out, which is something they can only do at you guessed it brick and mortar mattress stores.
Next: The one place mattress store owners dont spend money.
I Wonder: Why Are There So Many Mattress Firm Stores
BOISEIf youve driven down any major thoroughfare youve probably seen them: large buildings with high windows and big glowing signs. Inside, dozens of places to rest your head.
Mattress stores are popping up all over the valleyand one chain has taken the idea to new heights. In three years of following #BoiseDev, its the question I get most often:
Was just talking about this. Im endlessly fascinated by the number of mattress stores near the mall and on Eagle. WHY.
Melissa Davlin
Does Ada Co. really have enough mattress buyers to keep that many of these stores in business? Theres one on every other corner!
Tami
Mattress Firm had a toehold in the Boise market with a smattering of stores when it acquired Sleep Country USA in 2015.
Now, the sleeping giant has a unique concentration of stores which are often in close proximity, leading many to wonder: why so many?
Consider thisat State St. and Glenwood, Mattress Firm has a pair of locations that are just 300 feet apart from door-to-door.
But if dodging cars across seven lanes of Glenwood is overwhelminghead out to Eagle Rd. & Lanark, where two Mattress Firm locations are less than 200 feet apartand sit literally right next door to each other.
In all, Mattress Firm has 11 locations in Ada and Canyon Counties . No single store is more than one mile from a sister outlet.
The answer, it seems, boils down to simple ease of access:
Makes sense, right? But why so many stores so close together?
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How Many Mattress Stores Are There In The Us
There are almost 16,000 mattress stores in the United States, according to IbisWorld. These 16,000 stores generate a total revenue of $14 billion. Mattress Firm, one of the most popular mattress chains in the U.S., has over 2,600 locations across the country. This also includes their other stores like Sleepys and Sleep Train.
The Recession Created Demand
Mattresses are expensive. During a recession, people put off buying new mattresses, creating a sort of mattress store boom once the economy started to turn around. This happened between 2008 and 2012, and the bubble resulted in supply meeting demand in the form of more and more mattress stores.
People typically purchase new mattresses when they move or get married, or every eight years on average.
Next: Buying a mattress is special for this reason.
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Why Are There So Many Mattress Stores In Austin
In the Austin metro area, there are 76 Mattress Firm locations. To put that in perspective, there are 93 Starbucks in the same area. There are 94 7-Eleven stores. You might go to either of those a handful of times a month, but most Americans will buy a mattress only a handful of times over a lifetime. How did they blanket the Austin market? Acquisitions. Mattress Firm was founded in 1986.
Is There Money In Selling Mattresses
Mattresses offer one of the best profit margins in retail. While some grocery store chains might earn a 5 percent profit margin, mattresses have a markup in the 40 to 50 percent range, according to Consumer Reports. According to one study, a $3,000 mattress might only cost $300 to manufacture a 900 percent markup.
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People Care About Mattresses
At the end of the day, most people put a lot of thought into purchasing a new mattress. They ask their friends where they bought theirs, they solicit Facebook opinions, they read reviews, they shop around. For such a large, expensive item that youll use almost every day, that kind of meticulous planning makes sense.
The reason mattress stores may survive the retail apocalypse is that people care about the product. After all, a good nights sleep is worth the cost.
The Truth: Salespeople Are There To Help Themselves Make Mattress Sales
Sorry to say, but some salespeople do not have your best interest in mind when helping you shop for a mattress. Their job is to make a sale. Even if they arent working on commission, there are quotas to meet, overstocked mattresses to push, and non-commission bonuses to earn.
Some salespeople are helpful and genuinely interested in helping you find the best option as long as it is in their store.
Do you find high-pressure sales tactics uncomfortable when trying to make a rational decision? Salespeople tend to be smooth talkers. You may not realize youve been duped until it is too late. Or, perhaps you just want to get out of there and rush the decision.
If you feel sales pressure, your best bet is always walking out of the store. When you are ready to make a decision on your terms, there will still be a mattress for sale there. Or use their high-pressure sales tactics to get yourself a bargain. Set your own price and walk away if it exceeds your budget. Online sellers tend to have less markup, but may offer additional perks, too.
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When Did Mattress Barn Merge With Mattress Firm
Mattress Barn was a chain of mattress stores located only in Florida. On August 29, 2016, it was announced that Mattress Firm would acquire all of the remaining Mattress Barn locations. In September 2016, all of the remaining stores converted into Mattress Firm.
Sleep America was an Arizona bedding retailer founded in 1997 by Debbie and Leonard Gaby. By the time of Mattress Firms acquisition of the company, they had about 30 stores. They were based in Phoenix, Arizona. On January 6, 2015, Mattress Firm acquired Sleep America for $12.5 million.
As of 2016, the company operated over 3,600 locations in 48 U.S. states. On October 5, 2018, Mattress Firm filed for Chapter 11 bankruptcy. The company planned to close 200 unprofitable stores and is said it was considering closing up to 500 other stores out of the more than 3,300 it operated at that time.
Mattress Barn was a chain of mattress stores located only in Florida. On August 29, 2016, it was announced that Mattress Firm would acquire all of the remaining Mattress Barn locations. In September 2016, all of the remaining stores converted into Mattress Firm.
Mattress Firm Inc. is an American retailing company and mattress store chain founded on July 4, 1986.
How Often Do Mattress Stores Need To Sell Mattresses
In fact, mattress stores need to sell fewer than 20 mattresses per month to cover operational costs. Mattress stores dont have a lot of overhead, either. Many dont carry a large inventory in store. Instead, they keep mattresses at a nearby warehouse and ship them to the customer. Some stores even ship directly from the manufacturer.
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Now Mattress Firm Is Optimizing Its Footprint
After all that acquisition, the company worked to rationalize its store fleet and even closed a number of stores. Mattress Firm uses a proprietary system with data analyses and financial viability forecasts to identify optimal locations, while also respecting its landlord relationships and its long-term leases.
We are committed to optimizing our footprint and ensuring we continue to provide our customers easy, convenient access to our products, the spokesperson added. Similar to coffee shops, fast food restaurants, and gas stations, our store placement is based on factors including population, income, and drive time. Its critical for us to invest in real estate in highly trafficked intersections and shopping centers in key markets to maintain visibility, so, in actuality, sometimes it does make financial sense to have stores in close proximity.
As WBUR reported in 2018, Mattress Firm wanted to be customers’ only choice for mattress buying. Their stated premise strategy is called relative market share, Seth Basham of investment firm Wedbush told WBUR. So they want to be a leading market share player in any given local market so that they can drive economies of scale in advertising as well as distribution.
How Many Mattress Firm Locations Are There
4.5/5
Subsequently, one may also ask, how many Mattress Firm stores are there in the US?
Business. Before their bankruptcy in 2018, the company operated over 3,600 locations in 48 U.S. states. Mattress Firm has been owned by Steinhoff Holdings since 2016.
One may also ask, how many mattress firms are there in the world? BOBKOFF: All right. So first of all, it is true that there are a lot of Mattress Firm stores in the U.S. Five years ago, the chain had 700 stores. Earlier this year, there were 3,300. That’s about a third of the 10,000 mattress stores in this country.
Also asked, how is mattress firm still in business?
Mattress Firm plans to close up to 700 stores as part of its Chapter 11 bankruptcy, including more than 200 within days. The nation’s largest mattress retailer said in a court filing that it will not conduct typical liquidation sales, where customers might otherwise score a going-out-of–business deal.
Are Mattress Firm stores franchises?
Mattress Firm provides franchises with retail worker training, a large selection of bedding suppliers, and an in store TV network featuring educational content about sleep and selecting the right mattress.
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Is Owning A Mattress Store Profitable
1. Mattresses are high-margin items. At grocery stores, profit margins hover right around 5%. Meanwhile, a $3,000 mattress costs about $300 to make giving mattress stores a whopping 9,000% profit when they sell one.
As of 2016, the company operated over 3,600 locations in 48 U.S. states. On October 5, 2018, Mattress Firm filed for Chapter 11 bankruptcy. The company planned to close 200 unprofitable stores and is said it was considering closing up to 500 other stores out of the more than 3,300 it operated at that time.
The Truth: Sales Jargon Is Readily Available Facts Are Not
This myth is also known as the Mystery Component Scam. Listen to your salesperson speak, and see if you tell the jargon from the helpful, tangible, comparable, and measurable items.
Manufacturers like to use trademark names for mattress components that make them sound amazing. Things like Exquisite-lush foam are a trade name, not a product descriptor.
Instead, ask about foam density and thickness of the support and comfort layers. Ask if the material is plant or petroleum-based. Ask about the fire-retardant materials. Make your salesperson provide you with useful information.
But, what makes it a bit tricky is that there is no objective measure on what makes the perfect mattress . Its not like a car where you can compare MPG, size, features, etc. Are more springs better than fewer? How thick should your memory foam mattress be?
Researching online beforehand might help you crack the code. The better educated you are about your purchase, the more it will help your chances of choosing a good quality bed.
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Mattress Stores Have Low Overhead
The average mattress costs between $900 and $2,000. Mattress prices are commonly marked up by 50% or more. That gives mattress sellers big profits on just one sale. In fact, mattress stores need to sell fewer than 20 mattresses per month to cover operational costs.
Mattress stores don’t have a lot of overhead, either. Many don’t carry a large inventory in store. Instead, they keep mattresses at a nearby warehouse and ship them to the customer.
Some stores even ship directly from the manufacturer. This lets them sell mattresses without ever having to manage their products.
Mattress stores don’t typically have a lot of staff working at one time. Most employees work on commission. So if they don’t make a sale, they don’t get paid.
How much do mattress stores mark up their prices?
What Store Has The Best Prices On Mattresses
If youre shopping for a good mattress deal, you might want to try looking online rather than at a local store. Online mattress companies have fewer overhead costs and dont sell through a middleman that will mark up the price for greater profit. Most online mattress retailers offer promo codes and other discounts to pass their savings onto you.
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Is Mattress Firm Going Out Of Business
Mattress Firm plans to close up to 700 stores as part of its Chapter 11 bankruptcy, including more than 200 within days. The nations largest mattress retailer said in a court filing that it will not conduct typical liquidation sales, where customers might otherwise score a going-out-of-business deal.
Myths About Buying A New Mattress
So, why are so many of todays best mattress brands founded online? Well for one, traditional mattress stores hold a slew of tricks up their sleeves to make sure you walk out of there having purchased something. Below, we outline some of these tricks and several common myths surrounding mattress shopping.
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They Dont Need Many Employees
Unless theyre having an 80% off sale, you wont typically find mattress store swarming with customers. Less foot traffic means fewer employees, and fewer employees means less overhead for the store.
Plus, the stock isnt constantly changing like it is at clothing retailers or grocery stores, so its cheaper to keep the store stocked.
Next: Heres the reason online sales arent dominating.
Too Many Mattress Stores
Around the time that the money-laundering conspiracy theory took off, there were 3,500 Mattress Firm stores in the U.S.
If it seemed like there were a ridiculous number of stores open, that’s because there were. Mattress Firm filed for bankruptcy in 2018 and closed more than 700 stores as a result.
So, there’s no conspiracy theory after all. The truth is a bit more boring. The mattress industry makes it easy to keep stores open. Pair this with a company that expands too quickly and you get a mattress store on every corner.
How often do people buy a new mattress?
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The Mattress Firm Bubble A Look At Its Retail Locations As It Files For Bankruptcy
Mattress Firm’s stores tend to be clumped close together nearly half of all of its stores are within a one mile radius of each other.
Mattress Firm is the largest mattress retailer in America with 3,420 store locations across 49 states and Washington D.C. Over the past decade, it bought out competitors such as Sleep Train, Sleep Country USA and Sleepys. The Sleepys deal happened in 2016, the same year that Mattress Firm was acquired by Steinhoff International for $3.8 billion.
Today, the coast-to-coast sleeping giant is reportedly facing bankruptcy.
According to a Reuters exclusive, Mattress Firm may be filing for bankruptcy protection as soon as the end of this week. This is likely spurred by its rapid expansion in spite of several mattress-in-a-box competitors breaking out in recent years.
UPDATE: Mattress Firm officially filed for Chapter 11 bankruptcy today, with CEO Steve Stagner stating, “we will exit up to 700 stores in certain markets where we have too many locations in close proximity to each other.”
When we last wrote about Mattress Firm, there were several concerns with the company, such as executive turnover, peculiar Google reviews and, of course, redundant locations. Now that this bankruptcy will affect its retail footprint, especially in those redundant locations, it’s worth revisiting the Mattress Firm bubble effect with new data insights.
Here are the top-ten states that have the largest percentage of repetitive stores:
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