Minneapolis-based Sleep Number files Chapter 11, eyes sale
Minneapolis-based Sleep Number Corp. filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York on June 12, 2026, and said it will pursue a sale of the business.[1]
Canadian retailer Sleep Country Canada has submitted a $415 million stalking-horse bid to buy the company and assume certain liabilities, the company disclosed.[1] Sleep Number listed about $672.5 million in debt and said it plans to seek up to $260 million in debtor-in-possession financing, including up to $65 million in new money, to keep operations running during the court-supervised process.[1]
Net sales rose to a record $2.18 billion in 2021 after an 18 percent gain that year and a 9 percent increase in 2020, driven by pandemic-era demand for home goods. The company expanded its store base, manufacturing capacity, and debt during that boom and now says management "over expanded" its cost structure and that the resulting leverage is unsustainable.
Sales have fallen four straight years, including double-digit declines in 2024 and 2025 and a 19 percent year-over-year drop in the first quarter of 2026. Sleep Number operates roughly 577 U.S. retail stores and employed about 3,000 people as of early 2026, and it had sought rescue financing earlier this year before turning to Chapter 11.
The mainstream summary does not address the broader context of declining consumer spending on home goods, which has significantly impacted Sleep Number's sales. According to McKinsey's May 2026 report, inflation and job concerns have led to a two-year low in consumer sentiment, causing cutbacks in discretionary spending across various income levels. This trend likely contributed to Sleep Number's four consecutive years of declining sales, including a staggering 19 percent drop in early 2026.
Furthermore, while the summary mentions Sleep Number's $415 million stalking-horse bid from Sleep Country Canada, it overlooks the implications for equity holders, who face total loss as noted in SEC disclosures. This aspect raises questions about the long-term viability of the company and the potential for further consolidation in the North American mattress market, a trend highlighted by Mordor Intelligence's report on the industry's shift towards vertical integration and omnichannel control.
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📊 Relevant Data
Sleep Number operates approximately 577 retail stores in the United States and employs about 3,000 people as of early 2026.
Sleep Number Announces First Quarter 2026 Results — Sleep Number Investor Relations
The North American mattress market was valued at approximately $18 billion in 2025.
Mattress Market Size, Share & Industry Analysis Report — Fortune Business Insights
📌 Key Facts
- Sleep Number Corp., headquartered in Minneapolis and traded as Nasdaq: SNBR, filed for Chapter 11 bankruptcy on June 12, 2026, in the U.S. Bankruptcy Court for the Southern District of New York.
- Sleep Country Canada submitted a $415 million stalking-horse bid to acquire Sleep Number and certain liabilities, according to an 8-K filed with the SEC.
- Sleep Number lists roughly $672.5 million in debt and plans to obtain up to $260 million in debtor-in-possession financing, including up to $65 million in new financing, to keep operations running.
- The company’s sales peaked at $2.1 billion in 2021 and have fallen for four consecutive years, including a 19% year-over-year drop in the first quarter of 2026.
- Management admits it "over expanded" its cost structure — stores, manufacturing, and debt — during the pandemic demand spike, and now calls the resulting debt load unsustainable.
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