Tempur Sealy is a billion-dollar company — just look at their Q1 2024 earnings of $1.19 billion. So there’s no question that they would survive if the acquisition of Mattress Firm was denied in litigation with the FTC.
The more important question is, what happens to Mattress Firm if the deal falls through?
The company hasn’t exactly had a stellar financial track record. Its most recently reported earnings show net income in the quarter dropped 35.7% to $19.1 million, compared with $29.7 million in the second quarter of last year ended April 2. The retailer posted a 4.6% decrease in net sales to $947.6 million for the second quarter as well.
Soon after the FTC announcement, a parody about the blocking of the deal went up, causing some commotion in the industry as it looked like a Mattress Firm guerilla marketing effort.
While it does not appear to be connected to the company directly, it does make a point about the severity of the merger and brings that to public light. It also alludes to something that it may not have meant to, which is that Mattress Firm might be desperate if the deal is denied. Albeit not desperate enough to spread bed bugs.
Time will tell if this ends up being a free marketing campaign for Mattress Firm or if this makes consumers doubtful of the acquisition.
In the end, it’s not a question of whether Mattress Firm will shut down completely if the deal doesn’t go through — as that’s not likely to happen.
Instead, they would likely be bought by another private equity company, close locations and a void would open up for retailers like Mattress Warehouse, US Mattress and Sleep Number to fill and take that market share. Independent retailers could scoop up some of that market share as well.
The TikTok above suggests that Mattress Firm represents nearly 3% of the entire market share in the industry. However, according to a report by TraQline, that share may be as large as 18%.
That may seem small when you look at the big picture, but a study by solutions provider Podium shows that the mattress industry is worth roughly $39 billion and will grow to $60 billion by 2030. Some quick math shows that 18% of $39 billion is $1.17 billion, so Mattress Firm’s market share is notable.
It also explains that SSB and Tempur together hold 45.4% of the global market share — which makes it more apparent that if the acquisition went through, Tempur would hold well over half of the entire market share of the industry.
By allowing other retailers to get in on even a part of Mattress Firm’s market share brings competition back into the picture — which is healthy.
I firmly believe that the industry needs a strong Mattress Firm. It brings so much awareness to consumers through its marketing and offers affordable options for the everyday consumer.
However, judging by the FTC’s complaint, I’m not sure a Mattress Firm controlled by Tempur Sealy would promote competition.
This is not a serious article. There are simple math and business equations here that are done incorrectly. Hopefully the 14 people that read it won’t take it seriously.