Houston — Over the last fiscal year ending January 31, 2012, Mattress Firm Holding Corp. opened 41 stores and completed the acquisition of 55 specialty mattress stores from Mattress Giant.
“We completed fiscal year 2011 with great momentum, producing our highest quarterly sales and comparable-store sales growth in the fourth quarter and accentuating the strong financial results experienced throughout the year,” says Steve Stagner, Mattress Firm’s chief executive officer.
During fiscal year 2011, the company opened 106 new stores and added 55 stores acquired from Mattress Giant Corporation, while closing 24 stores, bringing the total company-operated stores to 729 as of January 31, 2012.
In addition, Mattress Firm has signed a purchase agreement for all of the equity interests of Mattress Giant for approximately $47 million in cash, subject to customary purchase-price and certain other adjustments. The company expects that the transaction, which remains subject to customary closing conditions, will be completed during its fiscal second quarter ending July 31, 2012. The company expects to fund the purchase price from cash reserves.
In a separate transaction, the company acquired 55 stores from Mattress Giant in the Atlanta, St. Louis and Minneapolis markets in November 2011, and has substantially completed the integration of those stores. Upon closing of the pending acquisition, the company expects to operate approximately 180 additional Mattress Giant specialty retail stores in Texas and Florida, which represent the two largest states in which Mattress Firm currently operates. The stores are located in seven metropolitan markets including Miami, Naples/Ft. Myers, Orlando, Tampa and Jacksonville in Florida and Houston and Dallas in Texas, all representing markets where Mattress Firm currently operates a total of 240 stores.
The company expects to rebrand substantially all of the Mattress Giant stores as Mattress Firm at an average cost of approximately $80,000 to $85,000 per store. After Labor Day, permanent signing as well as renovations required to bring all the stores, except those that will close, up to Mattress Firm’s standards will be undertaken and are expected to be substantially complete by the start of fiscal year 2013.
“We are extremely excited about the pending acquisition of Mattress Giant and the further advancement of our relative market share in several of our largest markets,” says Stagner. “We have a consistent track record of supplementing our organic growth with opportunistic acquisitions. By acquiring these stores, which historically have represented the best performing locations in Mattress Giant’s system, we immediately strengthen our ability to capture additional sales and better serve the consumer.”
In connection with the acquisition of Mattress Giant, Barclays is acting as financial advisor to Mattress Firm.
For more information, visit www.mattressfirm.com.
SOURCE: Mattress Firm