As of today’s writing, Mattress Firm has signaled to Wall Street that it is exploring bankruptcy options as sales decline due to “increased competition from online mattress disrupters”. Of course, they mean the likes of direct-to-consumer, mattress-in-a-box, online retailer Casper. Traditional retailers are having “trouble competing” with these “low cost upstarts”.
I call B.S.
I’d believe Mattress Firm if I hadn’t seen four such stores – all branded Mattress Firm – rent expensive strip mall space within a five mile radius of my home. How many mattress retailers do we really need? (The normally-sensible Freakonomics podcast did a show on this and showed that there was room in the market for a zillion mattress stores. Riiiiight.)
It seems to me Mattress Firm is failing for a much more boring reason: It has a poor channel marketing strategy that led to a capital crunch. Mattress Firm overbuilt to flood the market and capture share from other brick and mortar retailers. While it invested its capital in that strategy, it was not able to invest in online options…or acquire one that already existed.
Disruption isn’t at the root of every business problem. Sometimes, you need to look in the mirror.
Photo credit: Houston Chronicle