Mattress Firm chairman Steve Stagner said in late December that the Houston-based bedding retailer planned to close 200 of its stores within the next 18 months in a bid to improve performance as parent company Steinhoff International grapples with a deepening financial scandal. The company, which has about 3,400 locations, including this one at 3845 Southwest Freeway in Houston, hasn’t said which locations are on the chopping block.
Steinhoff International, the retail conglomerate that owns Houston-based Mattress Firm, said Tuesday that its accounting issues date back to 2015 or earlier.
The company said in a release that it will restate its 2015 financial results in addition to those from 2016 and 2017. It cautioned that the restatement of results prior to 2015 is “likely to be required.”
Steinhoff, which last year acquired Mattress Firm for $3.8 billion, is running low on cash and investor confidence amid an accounting investigation that began last month. The company hired PricewaterhouseCoopers to examine the validity of its past financial statements and the value of roughly $7 billion in assets, and European regulators are investigating independently.
The company revealed last month that it did not have “detailed visibility” into the cash flows of its many subsidiaries, which face financial uncertainty as the accounting scandal deepens.
At a meeting with Steinhoff lenders last month, Mattress Firm chairman Steve Stagner said that his company plans to close about 200 stores as part of a strategy to boost revenue to $4 billion within the next five years. He said the plan will require about $200 million next year to terminate store leases and revamp its product assortment, among other things.
Randy Carlin, Mattress Firm’s chief real estate officer, said in a statement that the company will determine the store closures after “case-by-case evaluations” during the next 18 months. He added that the company will continue to open stores and enter new markets.
The company late last month secured a $75 million line of credit. It plans to increase that amount to $225 million, the maximum amount available under the loan agreement.