Steinhoff’s cash-strapped bedding subsidiary Mattress Firm, situated in the United States, has emerged out of bankruptcy with access to $525 million funding and 660 fewer stores. This development comes after the firm filed for voluntary bankruptcy seven weeks ago.
Danie van der Merwe, the outgoing CEO of Steinhoff said “this short process has enabled Mattress Firm to strengthen its balance sheet and optimise its store footprint, and it emerges as a stronger and more competitive company”.
Van der Merwe announced he would be stepping down from the CEO position at the end of November 2018, and revealed the latest development was a further positive step in the wider Steinhoff restructuring “which continues to make good progress”.
Restructuring of the Mattress Firm involved the sale of 49.9 percent of the business to its founders, who were providing the $525 million new funding. Steinhoff said it hopes that its release from hundreds of unattractive leases and the liquidity boost from the sale will enable it deal with a more competitive market place.
The voluntary bankruptcy comes just two years after Steinhoff International, a South African international retail holding company which operates in Europe, Africa, Asia, the United States, Australia and New Zealand, had paid a hefty $2.4 billion for 100 percent of the largest mattress retailer in the United States and took on its huge debt burden.
The purchase price was pitched at more than twice the company’s share price at the time.