Does your mattress support the MAFIA?!
“Behind every successful fortune there is a crime.” ― Mario Puzo, The Godfather
Conspirators!
We found something fishy and we want your opinion on it.
COINCIDENCE? I. Think. NOT!
First, let’s take a look at some photographs. Let’s start in Boise Idaho.
Two Mattress Firms? Right next to each other? Hmm… Ok how about this one in Atlanta, Georgia? (hint: follow the red arrows.)
What?? Again with the Mattress Firms right near each other? Quite suspicious, quite ‘spicious indeed… Ok, one more. This time in Austin, Texas.
What in TARNATION is going on here?!?! That’s TEN Mattress Firms all in the same geographic location (and FOUR red arrows pointing willy-nilly near them!)
There are over 3500 Mattress Firms in the United States, and over 80 distribution centers. In 2016, South African retailer Steinhoff bought Mattress Firm for a spicy $3.8 billion (buh buh BILLION.) Analysts were a bit confused, to say the least. Why in the wide world of sports would anyone spend that kind of money on a business suffering from a bout of extreme competition, with tech companies like Casper & Purple disrupting the space by selling Direct To Consumer?
Leave the Gun. Take the Memory Foam.
So what might be going on here? According to the Reddit thread (which prompted journalists to start investigating this story), it comes down to one answer: money laundering.
Money laundering (from this very helpful article) is “the act of making money that comes from Source A looks like it comes from Source B.” So, instead of having to tell the IRS that their money comes from overseas or extortion or drugs, criminals funnel it through legal means like real estate (or mattress retailers.)
The United Nations Office on Drugs and Crime claims that anywhere between $800 billion and $2 trillion goes through the rinse cycle every year. That’s roughly 2-5% of the planet's GDP! So it has to happen somewhere. Why not Mattress Firm?
The story found so much traction, Mattress Firm was forced to respond
As the story broke, Mattress Firm responded via everyone’s favorite way to pretend to care about things, Twitter:
“We know we have a lot of stores and understand that some of them are so close together it’s funny, but there’s a strategy behind it. The idea that the proximity of our store locations is related to money laundering or any illegal activity is absolutely false.”
Sure, buddy. Sure.
Toward the latter half of 2018, the Steinhoff stock (the company that bought Mattress Firm) plummeted 62% in one day. Then its top two executives & a chairman resigned, and the company cited “accounting irregularities” as they postponed the publishing of their full-year accounts. Yikes.
And around summer 2019, Mattress Firm filed for bankruptcy...
Okay, but what about the the less cool side of the pillow (other plausible arguments)?
For those wondering about the legitimacy of our reporting, here’s some of the “logical” reasons for Mattress Firm’s business practices (ugh):
Crazy high markup on merchandise
Low Overhead, few employees
Discounts only affect the sales person’s commission, not the company’s bottom line
Mattress Firm recently bought out a major competitor and just converted those new stores
The recent bankruptcy allows them to get out of past leases from the merger
Could it be that simple? Is this just an Occam’s Razor situation? Let us know in the comments and maybe we’ll revisit this one with more data.
Check these out if you want to dive into something a little more… conspiratorial.
1.NPR’s Planet Money did a terrific episode covering the topic
2.Business Insider’s article
3. The infamous reddit thread (also a solid spot for more fun conspiracies!)
Next week, hang on to your designer handbags and clutch your pearls… It’s the Marfa Lights!!
Stay ‘spicious, Aloysius...
(Liking these bites? Give us a follow @CNibbles on Twitter and @conspiracynibbles on Instagram.)