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Mattress Firm Eyes Growth

Retailer aims to quadruple store count

David Perry -- Furniture Today, July 8, 2011

HOUSTON - Fast-growing Mattress Firm, which plans an initial public offering of stock, is planning to nearly quadruple its store count over the next several years to 2,500, officials said in documents filed in connection with the IPO.
     Mattress Firm says its goal is to become "the premier national mattress specialty retailer."
     The company, based here, outperformed all of its sleep shop rivals last year with the addition of 117 stores, and it plans to keep its foot on the gas, officials said. In the filing, they said the company will grow by opening new stores and making acquisitions in existing and new markets.
     "We estimate that we could operate approximately 2,500 Mattress Firm store locations in both existing and new markets in the United States," the company said. "We believe that attractive opportunities in the real estate market will help us execute our expansion strategy."
     The retailer said it had 680 stores as of Feb. 1 - 592 company-owned stores and 88 franchised stores.
     Mattress Firm said it plans to open 100 new company-owned stores in this fiscal year, and believes it can double the current number of its company-operated stores within the next five to six years.
     In addition, the company said it will seek to strengthen its market share with the goal of achieving the No. 1 position in each of its markets.
     The company also said it has a strong track record of supplementing its organic growth by acquiring retail mattress chains as opportunities arise. Since January 2008, Mattress Firm has acquired three mattress specialty retailers and franchisees with a net total of 38 locations.
     Mattress Firm also outlined these other elements in its growth strategy:
     ► Increase sales and profitability at existing stores. It will continue to undertake advertising and marketing initiatives aimed at improving customer traffic. Its current campaign focusing on the health benefits of replacing a mattress after eight years has fostered brand awareness and boosted traffic, the company said.
     The retailer also said it plans to boost the size of its transactions through effective sales techniques and the increasing demand for specialty and personalized mattresses.
     ► Selectively expand its franchise network. After franchise partners achieve critical mass in a market, the company may seek to purchase their stores.
     ► Continue to expand its proprietary product offerings and target additional channels of distribution. A strong growth avenue for the company is to partner with manufacturers to create innovative and proprietary products to further differentiate itself from its competition, the retailer said.
     Mattress Firm also noted that it has created a temporary "pop-up" store format that it has introduced at special events, including state fairs, bridal shows, home and garden shows, rodeos and boat shows.
     It expects to drive additional growth through alternative distribution channels in the future.

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Mattress Firm says it aims to grow to 2,500 stores

Jun 16, 2011

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