Full Breakdown
Sleep Number Files Chapter 11, Plans $415 Million Sale to Sleep Country Canada
6/13/2026, 8:44:41 AM
Bankruptcy Filing
On June 12, 2026, Sleep Number Corp., the Minneapolis-based maker of adjustable smart beds, filed for Chapter 11 in the Southern District of New York. The filing launches a Section 363 stalking-horse sale to Sleep Country Canada Inc., which has offered $415 million for most assets. The deal requires court approval, higher bids and standard closing conditions. Sleep Number attributes its distress to tariffs, inflation and a stalled turnaround that included a product redesign, new marketing and cost cuts. All 572 U.S. stores and the e-commerce platform will remain open during the process.
Data & Statistics
Q1 2026 net sales were $319 million, a $50 million loss. Debt is reported at $672 million (Reuters) or $1.3 billion (Retail Dive). Assets range $500 million-$1 billion; liabilities $1 billion-$10 billion. Sleep Number seeks up to $260 million of debtor-in-possession financing, including $65 million new money, to fund operations and the sale.
Official Statements
President and CEO Linda Findley said the capital structure “remains unsustainable” but the deal will “address our financial constraints” and enable “international expansion.” Sleep Country Canada President and CEO Stewart Schaefer called the partnership a “tremendous opportunity” to combine strengths and accelerate U.S. growth while adding Sleep Number’s technology to Canada. CFO Amy O’Keefe said “the unpredictable shifting of trade rules” has strained the supply chain.
Criticism & Opposition
Neil Saunders, Managing Director at GlobalData, warned that “Sleep Number essentially ran out of time to see its turnaround through” and “arguably needs to be part of a bigger group with more financial firepower and better distribution to survive.” He suggests the merger may not fully resolve the company’s financial challenges.
Conflicting Reports & Gaps
Sources differ on total debt—$672 million versus $1.3 billion—and on the exact tariff-related costs. The treatment of the NFL sponsorship with Travis Kelce and the impact of recent refinancing remain undisclosed.
Quotes
- “For 40 years, Sleep Number has been a leader in sleep innovation… our capital structure remains unsustainable.” — Linda Findley, President & CEO, Sleep Number.
- “We have long admired Sleep Number, its game-changing personalized sleep products… accelerate growth across the United States.” — Stewart Schaefer, President & CEO, Sleep Country Canada.
- “President Donald Trump’s ‘unpredictable’ tariff policy undermined the company’s global supply chain… and had a significant impact on its bottom line.” — Sleep Number court filing.
- “However, it arguably needs to be part of a bigger group with more financial firepower and better distribution to survive.” — Neil Saunders, Managing Director, GlobalData.
Next Steps
Bids are due July 8, with an auction on July 13. A sale-approval hearing is set for July 15, and the parties aim to close by July 31. Sleep Number will keep stores open, review its footprint, and seek higher offers while rejecting leases for 44 closed locations.
