Sleep Number Corp. Announces Agreement to Combine with Sleep Country Canada

June 14, 2026  by Karen Parrish in Business Strategy, Industry   

Through this process, Sleep Number fully expects to continue its day-to-day operations, including serving customers with its newest product, servicing warranties and delivering mattresses in homes. Customers can continue to shop for the company’s products online and in stores nationwide and, following the close of the transaction, Sleep Number plans to continue to assemble its products in the United States.

Linda Findley, president and CEO of Sleep Number, said, “For 40 years, Sleep Number has been a leader in sleep innovation, helping millions of customers improve their health and well-being through personalized sleep solutions. While we have made meaningful progress advancing our turnaround efforts and strengthening our operations, our capital structure remains unsustainable. Following a comprehensive review of our strategic options and a robust sale process, we are confident that moving forward with the Sleep Country Canada agreement and this court-supervised sale process will enable us to address our financial constraints. It will also position us to expand our business, helping more people achieve their best sleep both in the United States, and through future international expansion.

Findley continued, “As we move through this process, we are focused on serving our customers and supporting our partners. Our team is dedicated to advancing our new product line and continuing to serve current and future customers every day. We thank them, along with our partners and suppliers, for their continued support.”

Stewart Schaefer, president and CEO of Sleep Country Canada, said, “We have long admired Sleep Number, its game-changing personalized sleep products and the talented team behind them. Together, we see a tremendous opportunity to build on our complementary strengths and accelerate growth across the United States while introducing Sleep Number's innovative sleep solutions to consumers in Canada and other markets. We are excited about what we can accomplish together and the ways we can help support the wellbeing of our customers through every stage of their sleep wellness journey.”

Continuing to Serve Customers in Stores and Online

Throughout this process, Sleep Number fully expects to continue serving customers:

- Sleep Number stores are open and operating during their regular business hours.

- The company’s online channel, SleepNumber.com, is accepting new orders.

- The company is fulfilling and delivering orders, standing behind its 100-night trial and honoring its warranties, gift cards and Sleep Number Reward points and store credits.

- The infrastructure supporting Sleep Number’s connected smart beds and App will remain operational as they are today.

- Customers can continue to reach customer service and home delivery teams through all normal support channels.

Sleep Number is also continuing its turnaround strategy to spur growth and increase financial resilience. The company recently completed the largest product redesign in nearly a decade, launched its first major integrated marketing campaign in years, and continues to right-size the fixed cost base.

Additional Information Regarding the Court Supervised Process

Sleep Number initiated a voluntary Chapter 11 sale process in the U.S. Bankruptcy Court for the District of New York. The transaction is being undertaken pursuant to Section 363 of the U.S. Bankruptcy Code. As part of this process, Sleep Country Canada will serve as the “stalking horse” bidder in a court-supervised sale process. Accordingly, the proposed transaction is subject to higher and better offers, Court approval and other closing conditions.

Sleep Number expects to secure up to $260 million of debtor-in-possession (“DIP”) financing, including up to $65 million in new financing. Following court approval, this DIP financing, combined with cash generated from Sleep Number’s ongoing operations, is expected to support the business during the court-supervised process.

The company has filed a number of customary motions seeking Court authorization to support its operations during the court-supervised process, including the payment of employee wages and benefits without interruption. Sleep Number fully expects to pay suppliers for goods and services provided after the filing date.

Sleep Number has already been undertaking a review of its store footprint and, in connection with this process, the company will continue this work with the intention of maintaining as many retail locations as possible based on profitability. A&G Real Estate Partners is assisting the company with this effort. In connection with the start of the court-supervised process, Sleep Number has filed a motion with the Court to reject leases of 44 non-operational locations, which were already closed and not serving customers.

Additional information regarding the court-supervised sale process is available at forward.sleepnumber.com. Court filings and other information related to the proceedings are available on a separate website administered by the company’s claims agent, Kroll, at https://restructuring.ra.kroll.com/SleepNumber, by calling toll-free at (844) 408-3387 (or +1 (646) 825-3128 for calls originating outside of the U.S.), or by sending an email to SleepNumberInfo@ra.kroll.com.

Advisors

Sleep Number is advised by Davis Polk & Wardwell LLP as legal advisor, Guggenheim Securities, LLC as investment banker, AP Services, an affiliate of AlixPartners, as interim management and Joele Frank, Wilkinson Brimmer Katcher as strategic communications advisor.

Sleep Country Canada is advised by Goodwin Procter LLP as legal advisor and PwC as financial advisor.