Dive Brief:
- Mattress Firm on Monday confidentially filed draft documents for an initial public offering with the Securities and Exchange Commission, according to a press release.
- The retailer said it hasn't determined the price or number of shares to be offered.
- Mattress Firm said "any such offering" would take place after the SEC finishes its review of the filing and upon other market conditions.
Dive Insight:
After a $3.8 billion buyout from a private equity firm, mass store closings and a bankruptcy, Mattress Firm seems to have turned a corner.
The mattress retailer has benefited from heightened demand in the broader home goods sector since the pandemic began. In the first nine months of the year, Mattress Firm posted a 41% net revenue increase in local currency, while its comp sales increased 46.2% year over year. The retailer also grew its e-commerce sales by 24.5% year over year, accounting for 7.1% of total sales in the period.
As a result of it "leveraging stronger-than-expected sales and earnings," S&P Global Ratings earlier this month revised Mattress Firm's outlook from stable to positive while affirming its B+ issuer credit rating. The analysts pointed to the retailer's potential to sustain strong credit metrics beyond 2021 even as demand in the mattress category is expected to wane in the back half of the year.
"The positive outlook reflects the potential that we will raise our rating on Mattress Firm if its management team continues to successfully execute its omnichannel and private-label expansion strategies while growing the company's EBITDA," the analysts said.
Mattress Firm in 2016 was acquired for $3.8 billion by private equity firm Steinhoff International Holdings, which maintains about 50% control over the company. In 2018, the retailer entered — and exited — bankruptcy in just over a one-month period, with about 700 fewer stores. The retailer filed amid increasing online competition from brands like Casper and Tuft & Needle.
The potential initial public offering comes as more retailers have been making their public debuts. So far in 2021, Retail Dive has tracked 12 major retailers that have filed to go public.
