• Mattress Firm has filed for Chapter 11 bankruptcy protection, it said in a press release Friday.
  • As part of its bankruptcy restructuring, Mattress Firm could close as many as 700 stores.
  • It is the largest specialty mattress retailer in the United States, with around 3,400 stores. Mattress Firm has increasingly come under pressure as new startups such as Casper innovate the experience of mattress shopping and take market share.
  • Last October, Mattress Firm filed a lawsuit against two former employees, a broker, and a group of developers, accusing them of conspiring to push the company to aggressively expand.

Mattress Firm has filed for Chapter 11 bankruptcy protection, it said in a press release Friday.

It has been an eventful few months for the company. In the span of a year, it has been accused by internet sleuths of running a money-laundering operation, announced it would be closing almost 200 stores, and watched on as its parent company’s business practices have been investigated.

With approximately 3,400 stores, it is the largest specialty mattress retailer in the US and has increasingly come under pressure as new startups such as Casper innovate the experience of mattress shopping and take market share.

As part of its bankruptcy restructuring, Mattress Firm could close as many as 700 stores. 200 stores are expected to close in the next few days.

"The process we have initiated today will allow us to strengthen our balance sheet and accelerate the optimization of our store portfolio," Mattress Firm CEO Steve Stagner said in a statement.

"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 to each other. We intend to use the additional liquidity from these actions to improve our product offering, provide greater value to our customers, open new stores in new markets, and strategically expand in existing markets where we see the greatest opportunities to serve our customers."

Mattress Firm has been struggling under a heavy debt load. It owes mattress producer Serta Simmons just over $90 million, according to the bankruptcy filing.

Last October, Mattress Firm filed a lawsuit against two former employees, a broker, and a group of developers, accusing them of conspiring to push the company to aggressively expand and open stores.

Reports that the mattress retailer was considering filing for bankruptcy surfaced in August.