Sleepy's being bought by Mattress Firm Holding for $780M

Sleepy's, the Hicksville-based mattress retailer, is being bought by a giant competitor, Texas-based Mattress Firm Holding Corp., for $780 million, the buyer announced Monday.

Sleepy's, a family-owned business, is the nation's second largest specialty mattress retailer, with about 3,400 employees in more than 1,050 stores and other facilities in 17 states in New England and the mid-Atlantic and Illinois. Its website shows 25 stores on Long Island.

Mattress Firm has 2,400 stores in 41 states, including six in upstate New York.

The combined company will have about 10,000 employees and operate about 3,500 retail stores and 80 distribution centers in 48 states, according to Mattress Firm, which is based in Houston. Mattress Firm said it will continue operating under both the Mattress Firm and Sleepy's brands in the near term and will maintain an East Coast office on Long Island.

The acquirer is not ruling out store closures resulting from the combination. "At this point, no stores or distribution centers have been identified for closure," Mattress Firm chief executive Steve Stagner said through a spokeswoman. "Over the next several months, we will map out the best long-term strategy."

Publicly traded Mattress Firm, the nation's largest specialty mattress retailer, technically is buying HMK Mattress Holdings LLC, which owns Sleepy's.

The closing of the acquisition, which is subject to federal antitrust scrutiny and other regulatory approvals, is slated for the first half of next year.

"This transformational acquisition unites the nation's two largest mattress specialty retailers," Stagner said in a statement.

Sleepy's was founded in 1931 with a single store named Bedding Discount Centers on Flatbush Avenue in Brooklyn, the Sleepy's website states. The company kept expanding; in 1957 it was rebranded as Sleepy's.

In 2009, New York's Empire State Development Corp., provided Sleepy's with $1.5 million in aid to help offset the $69.7 million cost of building a new 450,000-square-foot headquarters and warehouse in Hicksville. In 2012, New York State pension funds invested $12.9 million in Sleepy's as part of a deal under which San Francisco private equity firm Calera Capital also took a stake in the company.

By 2014, Sleepy's, with about 636 employees in Hicksville, had more than 1,000 retail outlets in 16 states from Maine to North Carolina.

Mattress Firm said the merger will create the nation's first border-to-border, coast-to-coast specialty bedding retailer, whose scale will enable cost savings on distribution and delivery, national advertising, sourcing and procurement and other expenses.