Steinhoff Gets Boost as Mattress Firm of U.S. Exits Bankruptcy
(Bloomberg) -- Steinhoff International Holdings NV’s battle to stabilize itself received a boost as troubled U.S. bedding chain Mattress Firm emerged from bankruptcy with $525 million in funding to support operations.
The $3.8 billion acquisition of Mattress Firm in 2016 proved the final deal of an aggressive expansion drive that led to Steinhoff’s near-collapse amid an accounting scandal late last year. Of Steinhoff’s various chains around the world, including Conforama in France and Poundland in the U.K., Mattress Firm proved among the toughest to keep afloat, and the business entered Chapter 11 bankruptcy in October.
Mattress Firm will will operate about 2,600 stores across the U.S. after closing 660 during the bankruptcy process. The chain had expanded too aggressively, suffered from ineffective marketing and was embroiled in a dispute with suppliers, Steinhoff said in a presentation to creditors in London in September.
“This short process has enabled Mattress Firm to strengthen its balance sheet and optimize its store footprint, and it emerges as a stronger and more competitive company,” Steinhoff Chief Executive Officer Danie van der Merwe said in a statement on Thursday.
Steinhoff’s battered shares received a pick-me-up earlier in the week when the South African company announced that Commercial Director Louis du Preez will replace Van der Merwe as CEO, further distancing the company from the leadership of Markus Jooste, who quit in the wake of the scandal and has been referred to South African police.
The stock rose 5 percent in early trade in Johannesburg on Thursday, yet remains 96 percent below pre-scandal levels.
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