Mattress Firm Files for Bankruptcy

According to USAToday.com, the largest U.S. mattress retailer, Mattress Firm, said it has filed for Chapter 11 bankruptcy protection, as its corporate parent battles an accounting scandal and the retailer grapples with an onerous store footprint.

The retailer has 3,500 stores across the U.S., reflecting a time when the economics of mattress retailers was such that more was better. The stores are relatively cheap to run and faced little price competition. With new entrants like online retailer Casper now selling mattresses with little to no markup, that pricing umbrella has begun to collapse.

Bankruptcy is often a tool that retailers use to get out of unwanted leases. Mattress Firm CEO Steve Stagner said in a statement Friday the company will "exit up to 700 stores in certain markets where [it has] too many locations in close proximity to each other."

The company has also had to deal with its own corporate challenges. Last year, Mattress Firm's preferred brand, Tempur Sealy International, unexpectedly pulled its products out of the retailer following a pricing dispute. That left the retailer with less product and employees who now had to promote and sell Serta Simmons mattresses after years of promoting Tempur Sealy