Mattress Firm to landlords: Drop (rents or your store is) dead
The chain, which has filed for bankruptcy, said it would be forced to shutter locations without sharp reductions
Mattress Firm’s landlords have a tough choice on their hands. They can slash rents on hundreds of stores throughout the country and keep the embattled mattress retailer, or find new tenants.
CEO Steve Stagner told Mattress Firm’s landlords on a conference call earlier this month that the Houston-based chain would have to vacate their stores if the existing terms remained, according to Bisnow.
“I want to be clear that we are only asking for what we need and have no wiggle room for negotiations,” he said.
Some landlords have filed legal complaints, asking a judge to force Mattress Firm to abide by lease contracts. Others told Bisnow they would try their luck with new tenants.
Mattress Firm filed for bankruptcy earlier this month, saying it would shutter 700 stores around the country, starting with 200 immediate closures. That plan will still leave the company with 2,000 stores, including dozens of locations in Miami, New York, Chicago and Los Angeles.
Bankruptcy followed an ambitious but failed expansion that involved some 1,500 stores nationwide, starting in 2010. Last year, Mattress Firm sued https://therealdeal.com/miami/2017/12/15/after-1500-store-expansion-mattress-firm-sues-its-real-estate-team-and-prepares-to-trim/ two former employees and Colliers International former top broker Alexander Deitch for allegedly conspiring with developers to push the company into pricier locations.
Part of Mattress Firm’s downsizing plan is to shutter stores in markets where it has “too many locations in close proximity to each other,” it has said. In Illinois, it is closing 29 stores.
Mattress Firm is one of a number of once-ubiquitous retailers whose revenues have sagged in recent years and have been forced to close their doors. Two weeks ago, Sears Holding Company became the latest major retailer to file for bankruptcy, which came as no surprise to industry pros. [Bisnow] — Dennis Lynch