Steinhoff’s United States unit, Mattress Firm, has filed for voluntary Chapter 11 bankruptcy protection to strengthen its balance sheet and support its parent company’s debt restructuring, the South African company said on Friday.
The restructuring of the largest US mattress retailer comes as its parent Steinhoff fights for survival after revealing multi-billion euro holes in its balance sheet that wiped more than 90% off its market value and forced it to sell assets to fund working capital.
“The Mattress Firm Filing supports actions to strengthen its balance sheet,” Steinhoff International Holdings said in a statement.
Mattress Firm, which has 3 000 brick-and-mortar locations,will implement a restructuring plan that will initially close around 200 stores and reject up to 700 leases, with the possibility of further closures, it said.
The retailer has also received $650 million to fund ongoing operations and repay debt and costs associated with the restructuring.
Mattress Firm has been squeezed by online upstarts including Casper Sleep Inc.
The company said it expects to complete its restructuring in 45 to 60 days.