Mattress Firm’s leader says he’s leaving

Mattress Firm CEO and president Ken Murphy, after two years at the helm, will step down in March and cede the role to another executive during a particularly turbulent time for the company.

The company said Friday that executive chairman Steve Stagner, who served as the company’s CEO from 2010 to 2016, will resume that role on March 1. It said the decision “reflects the need for a singular voice of leadership” at Mattress Firm, which has faced financial uncertainty amid an accounting investigation of its parent company, South African retail conglomerate Steinhoff International.

“I am confident in the future of Mattress Firm, and bringing Steve back as CEO is the right thing to do for the next chapter of the business,” Murphy said in a prepared statement. “It’s bittersweet to step down, but I am incredibly proud of the success we have built together.”

Mattress Firm declined to provide further comment or interviews with its executives.

Murphy joined the company in 1998 as a retail sales associate in Greensboro, N.C. He climbed the ranks to become executive vice president of sales and operations in 2012, chief operating officer in 2014 and president in 2015.

He replaced Stagner as CEO in 2016 and led the Mattress Firm negotiations that led to its $3.8 billion acquisition by Steinhoff in September of that year. The deal included Steinhoff assuming more than $1 billion in debt that

Mattress Firm had racked up acquiring many of its competitors, ultimately becoming the largest U.S. mattress retailer with more than 3,400 locations nationwide, including more than 60 in Houston.

Steinhoff last month launched an internal probe into its books after disclosing “account irregularities” that could affect some $7 billion in assets.

The company later revealed that it did not have detailed knowledge of the financial workings of its many subsidiaries and admitted it will have to restate financial results dating back to 2015, if not earlier.

The disclosure triggered a cash crunch for Steinhoff as banks withdrew lines of credit, forcing the company to negotiate with lenders and sell assets including the corporate jet to raise cash. The company on Friday said its short-term cash requirements had been “largely addressed” as a result of those efforts.

It noted in a presentation that Mattress Firm, which will require about $200 million this year to close unprofitable stores and add new products, had resolved some of its funding needs. Mattress Firm late last month secured a $75 million line of credit that could increase to $225 million.

Stagner, who started his career at Mattress Firm 22 years ago as a franchisee with one store and $1,300, has played a key role in the negotiations with Steinhoff ’s lenders.

At a meeting in London last month, he sought to assure lenders of his company’s stability by outlining a plan to boost revenue to $4 billion within the next five years by closing about 200 stores, expanding its privatelabel products to capture 40 percent of sales and investing more heavily in its e-commerce operations.