Mattress Tub & Past on Wednesday stated it’s slicing 20% of its company and supply-chain employees and shutting 150 poor-performing shops because it seeks to chop prices amid a gross sales stoop. Shares of the corporate plunged 25% in morning buying and selling.
The corporate additionally stated it has lined up $500 million in new financing, together with a $375 million mortgage. It additionally introduced plans to promote extra shares to the general public, with the proceeds directed towards paying down debt. The retailer added that its second-quarter same-store gross sales crumbled about 26% in contrast with the year-earlier interval.
Mattress Tub & Past has been battling declining gross sales and mounting losses as customers have shifted to opponents. Earlier this 12 months, GlobalData analyst Neil Saunders famous in a analysis report that the chain’s shops are “quite messy and lack primary merchandising self-discipline.” Whereas its shares had attracted meme-stock merchants, the retailer misplaced one in all its large buyers earlier this month when Ryan Cohen, the billionaire founding father of on-line pet meals firm Chewy,.
The retailer is overhauling its technique and operations at a time when customers are slicing again on spending amidand weaker family funds, famous Saunders in a analysis word Wednesday.
“Mattress Tub & Past is reinventing itself on the worst doable time,” Saunders wrote. “Certainly, the preliminary second quarter outcomes – with a catastrophic gross sales decline of 26% — underline the extent of the issue.”
Mattress Tub & Past stated it should additionally streamline its retailer manufacturers by discontinuing three of its 9 labels: Haven, Wild Sage and Studio 3B.
The corporate has virtually 1,000 places, which implies that it is going to be shuttering about 15% of its shops, in line with FactSet.