Mattress Firm closing hundreds of stores after bankruptcy

Mattress Firm filed for bankruptcy on Friday, with the bed retailer saying it plans to close hundreds of stores.

The country's largest mattress chain, which has 3,400 locations nationwide, will shutter 200 stores over the next few weeks and as many as 700 by year-end, according to its Chapter 11 filing seeking bankruptcy protection. The company plans to continue operating and paying its suppliers.

"Leading up to the holiday shopping season, we will exit up to 700 stores in certain markets where we have too many locations in close proximity," Steve Stagner, the company's CEO, said in a statement. Declaring bankruptcy will allow the company to "strengthen our balance sheet," he added.

According to court documents, Mattress Firm has more than $1 billion in liabilities and has more than 50,000 creditors. It owes its largest creditor, Atlanta-based mattress maker Simmons Manufacturing Co., nearly $65 million.

Mattress firms has sales of more than $3 billion, but in court documents the company said it expects to lose about $150 million in in fiscal year 2018. 

Mattress Firm is the most recent in a series of bankruptcies by national retailers as consumers chose to purchase goods online.   

The company's filing comes only days after Amazon said it would delve into the online "bed-in-a-box" business. Walmart also entered the fray earlier this year with its own online premium mattress brand, Allswell.

Founded in 1986, Mattress Firm bought competitor Sleepy's for $780 million in 2015. 

The company's difficulties include an accounting scandal at its parent company, Steinhoff International, and losing a large contract with Tempur Sealy International last year.