Casper Sleep Inc. will be bought by Durational Capital Management, bringing together mattress and chicken retailers under one private equity roof. 

Durational, which has invested in Kentucky Derby-operator Churchill Downs and owns fast-food chicken chain Bojangles, will acquire Casper for US$6.90 per share, a 94 per cent premium to the closing share price on Friday. 

It’s another sign that this new generation of direct-to-consumer brands trying to disrupt retail may not be able to deliver in the public market. The mattress company broke through into the mainstream with savvy marketing for its bed-in-a-box offering, but it’s struggled to find a second act.

Casper announced the deal as it posted earnings that missed analysts estimates. The company also named Emilie Arel its new chief executive officer, effective immediately, in replacing co-founder Philip Krim.

Casper was a unicorn startup before going public in February 2020. On that first day of trading, it closed at US$13.50 a share for a market value of US$535 million. That came after being valued at US$1.1 billion as a private company. 

The IPO sparked a class-action lawsuit by investors, accusing the company of filing misleading financial prospects. Casper’s IPO filing revealed that it had accumulated US$300 million in net losses, in part due to a massive marketing budget to boost brand recognition. 

Casper shares jumped 88 per cent at 9:38 a.m. in New York on Monday. The stock had plunged 42 per cent this year through Friday.