Mattress Firm eyes Calif.
Set to buy 53-unit Mattress Gallery
By David Perry -- Furniture Today, September 16, 2007
Houston — Continuing its remarkable buying spree, fast-growing Mattress Firm is set to enter the California market with the planned purchase of Mattress Gallery, a 53-store chain based in Los Angeles.
Mattress Firm, one of the nation's largest mattress retailers, said last week it has signed a letter of intent to acquire Mattress Gallery, which operates stores throughout Southern California, including the Los Angeles, Orange County and San Diego markets.
Terms of the acquisition, which is expected to close within 60 days subject to the satisfactory completion of due diligence, were not disclosed.
The planned addition of Mattress Gallery marks the eighth acquisition for Mattress Firm in a little more than a year. The retailer has added more than 100 locations through acquisitions in the past 12 months, not including the 53 Mattress Gallery stores. In addition, the company says it plans to open more than 40 new Mattress Firm stores through the remainder of this year.
With the Mattress Gallery acquisition, Mattress Firm will be among the largest mattress retailers in Southern California. When the deal is completed, the retailer's total store count nationwide will grow to nearly 500 stores in 39 markets across 22 states.
"This acquisition allows Mattress Firm to enter the fast-growing Southern California market and underscores our commitment to grow both organically and through acquisitions that are a good geographic and strategic fit," said Gary Fazio, CEO of Mattress Firm.
"We are fortunate that Mattress Gallery has an established reputation in the markets it serves and has developed a loyal customer base by offering great products and exceptional customer service," he added. "We are committed to building on their reputation by bringing our unique retail experience, sleep knowledge and the broadest selection of products and brands in the mattress industry to create a unique destination for consumers."
Mattress Gallery locations are similar to Mattress Firm stores, averaging 3,000 to 4,000 square feet and located in strip centers or freestanding buildings. Mattress Gallery locations will transition to Mattress Firm stores over the coming months, adopting its expanded product selection, signature store format and Red Carpet delivery service.
Mattress Firm ranks No. 3 on Furniture/Today's list of the Top 25 U.S. Bedding Retailers, based on 2006 bedding revenues of about $400 million. The retailer ended last year with 358 stores. It ranked behind Minneapolis-based Select Comfort at an estimated $676 million and Bethpage, N.Y.-based Sleepy's at $430 million.
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