For retailers — for generations — a surefire way to grow your business was to buy up a competitor and add their stores to yours. The number of times this happened — particularly during the go-go days of the 90s and early 2000s is staggering.
But what was once smart is now just plain dumb. It’s a lesson the folks at Mattress Firm learned the hard way. For much of the past decade they had been buying up the competition and rolling up a pretty impressive operation. The crowning achievement was buying Sleepy’s in 2016, taking the company’s store count to 3,500 units. That’s when the strategy hit the fan…so to speak. Turns out that 3,500 often overlapping, sometimes poorly situated and generally unimpressive stores was not such a good thing.
Mattress Firm filed for bankruptcy this week and immediately announced it was closing 700 doors. Don’t be surprised if that number climbs before the bankruptcy process is said and done.
Mattress Firm was basing its business model on an out-of-date premise and it is now paying the price. What else would you call it but Stupid Real Estate Strategy.