Sleep Number files bankruptcy, plans $415M sale

Sleep Number filed for bankruptcy in New York on June 12 with about $672 million in debt, blaming inflation, tariffs and supply chain disruptions forcing the court-supervised process.

The smart-bed maker said a planned sale to Sleep Country Canada would create a “leading North American mattress and bedding company,” expanding its reach across the U.S. and Canada with a broader mix of products in stores and online.

Customers will still be able to shop in stores and online, receive deliveries and use warranties and smart-bed services as usual during the restructuring, the company said.

Headquartered in Minneapolis, Sleep Number employs about 2,920 people and operates 572 stores nationwide, according to Reuters.

Why did Sleep Number file for bankruptcy?

Sleep Number entered bankruptcy after mounting losses and rising costs strained its business. The company reported $319 million in net sales and a $50 million net loss in the first quarter of 2026, according to a Securities and Exchange Commission filing.

Court documents show the company had already tried to stabilize its finances by refinancing debt, closing stores and streamlining its product lineup, Reuters reported. Still, Sleep Number said tariffs and broader supply chain disruptions drove up costs and added uncertainty, ultimately pushing it to seek Chapter 11 protection.

USA TODAY has reached out to the company for additional comment.

Leadership comments and strategic direction

Sleep Number President and CEO Linda Findley said the company had made progress on turnaround efforts but that its capital structure “remains unsustainable.” She said the bankruptcy process and acquisition by Sleep Country Canada are intended to reduce debt and position the company for long-term growth, including potential expansion beyond the United States.

Sleep Country Canada CEO Stewart Schaefer said the deal would bring together complementary businesses and create opportunities to expand across North America, including introducing Sleep Number’s products to Canadian consumers.

If approved, the acquisition would combine Sleep Number’s U.S. footprint with Sleep Country Canada’s network of more than 300 stores.

What about Sleep Number's Travis Kelce partnership?

Sleep Number has maintained advertising partnerships with the NFL, including through a sponsorship agreement with Kansas City Chiefs tight end Travis Kelce.

Under the agreement, Kelce committed to purchasing Sleep Number stock on the open market and was eligible to receive additional shares over the course of the three-year partnership.

Court filings do not indicate how much stock Kelce acquired or how the sponsorship agreement will be handled during the bankruptcy process. In many Chapter 11 cases, existing equity shares are ultimately wiped out.

Contributing: Reuters

Reporter Anthony Thompson can be reached at ajthompson@usatodayco.com, or on X @athompsonUSAT