What happened

Shares of bedding manufacturer Tempur Sealy International (NYSE:TPX) jumped Wednesday, rising as much as 13.7%. As of 12:14 p.m. EDT, the stock was up 11.1%.

The stock's rise follows a report that Tempur Sealy competitor Mattress Firm is preparing to file bankruptcy.

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Image source: Getty Images.

So what

"Mattress Firm Inc., the largest U.S. mattress retailer, is preparing to file for bankruptcy protection as soon as this week," Reuters said this week, citing "people familiar with the matter."

Mattress Firm's parent company, Steinhoff International Holdings NV, has been under pressure from its debt load. The move would help the company's financial situation, Reuters said.

Tempur Sealy, which makes Tempur-Pedic mattresses, had ceased doing business with Mattress Firm during the last quarter of last year. In January 2017, Tempur Sealy announced the termination of its Mattress Firm contracts.

Now what

Mattress Firm's bankruptcy would likely mean Tempur Sealy is up against less competition, since Tempur Sealy had pulled its products from Mattress Firm last year.

Third-party retailers have been becoming less important to Tempur Sealy as the company's direct business, which includes sales from company-owned stores, e-commerce, and call centers, has been rising at strong rates. In the company's most recent quarter, direct sales rose 22% year over year, while overall sales were up 1.6% year over year.

Of course, nothing is official yet. Investors should keep an eye out for Mattress Firm or its parent company, Steinhoff International Holdings NV, to comment on the matter.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.