Mattress Firm’s revenues declined 16% in the quarter ending Dec. 31, parent Steinhoff International reported.
“Fundamental changes” at the company have had “a short-term negative impact on the business,” Steinhoff said. Like-for-like sales were down 10% in the quarter, largely driven by lower average unit selling prices. Like-for-like unit sales for the group declined by 3%, the company said.
Mattress Firm closed 99 stores in the quarter, the first quarter of Steinhoff’s financial year, while eight stores were opened.
“Management aims to close approximately 175 stores and open 75 new stores (inclusive of the store movements in the first quarter) during the 2018 financial year,” the company said. That would be a net store closing of 191 units.
Mattress Firm’s management has identified that the change in its major supplier “has resulted in gaps in the product range that are being urgently addressed,” the company said.
It said that trading conditions have been “negatively impacted by adverse weather conditions in several regions and a shift in the U.S. market, with the mattress online channel continuing to gain market share.”
The company also said that the rebranding of legacy store banners Sleepy’s and Sleep Train put “downward pressure” on the like-for-like sales, primarily in the East and West Coast markets. “Management’s expectations (based on past trends) are that it takes approximately 18 months for consumers to adopt these new brands,” Steinhoff said.
It said Mattress Firm is focused on “optimizing its store estate in an effort to right-size the overall estate and reduce the number of under-performing stores.”