1800Mattress.com files for bankruptcy

Is it time to say goodnight to 1800Mattress.com? The mattress retailer has filed for bankruptcy protection and intends on selling its business to Sleepy's, its onetime rival. A spokesman for 1800Mattress.com declined to comment.

1800Mattress.com, based in Long Island City, New York, has seen a big drop in sales and more stringent terms from vendors, according to this New York Times story. Reuters reported that the company's sales had fallen from $170 million two years ago to $100 million, and 15 of its 49 stores have recently closed.

"We've determined that Sleepy's offers us the best opportunity to recapitalize and move our business plan forward. This combination allows us to realign our capital structure and to pursue our historic strength in phone and Internet sales," company owner Napoleon Barragan told the Times. Franchises in New England, Philadelphia, central and southern New Jersey, and Florida are separate companies and not part of the bankruptcy filing.

1800Mattress.com started in 1976 as Dial-A-Mattress—if you grew up in the New York City area you're familiar with the "leave off the last 's' for savings" line in the TV and radio spots—when Barragan saw a newspaper ad for a company that sold steaks over the phone for home delivery. He was convinced the same approach would work with mattresses and offered people the ability to shop for a mattress and same-day delivery.—Kimberly Janeway

Essential reading: Be wary when you're buying from a company in bankruptcy.