Tempur Sealy terminates contract with Mattress Firm

CONTRIBUTED

CONTRIBUTED

International mattress maker Tempur Sealy announced it terminated its contract with U.S. retailer Mattress Firm Holdings Corp. following “considerable changes to their agreements, including significant economic concessions.”

After multiple failed attempts to enter into a supply deal, the company terminated all contracts with Mattress Firm on Jan. 27, the company said in a statement. Tempur Sealy’s shares have dropped already, about 23 percent down on Monday.

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“Over the course of the week, we conducted discussions with representatives of Mattress Firm and Steinhoff, and we considered their request for a significant change in economic terms,” said Scott Thompson, chairman and CEO of Tempur Sealy, in a statement. “Ultimately, we concluded that it was in the long-term interest of all of our stakeholders to terminate our contracts with Mattress Firm. This enables us to immediately reorient our employees and resources to support retail partners that exhibit a long-term commitment to Tempur Sealy’s brands.”

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Mattress Firm accounted for 21 percent of the company’s sales in 2016. Excluding sales to Mattress Firm and Sleepy’s, the company expects its net sales increased as compared to the prior year by approximately 4 percent in the fourth quarter and 2 percent full year 2016, according to a news release.

Texas-based Mattress Firm has more than 3,500 company-operated and franchised stores in 49 states, including Ohio. Mattress Firm has a presence in Beavercreek, Centerville, Cincinnati, Columbus, Dayton, Hamilton, Huber Heights, Liberty Twp., Miamisburg, Middletown, South Lebanon and West Chester.

Mattress Firm opened a location at The Green Town Center in Beavercreek in 2016.

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