Sleep Number Corp., the mattress maker known for its customizable beds, has filed for bankruptcy and agreed to merge with Sleep Country Canada through a court-supervised process. The decision comes after years of weak demand and mounting financial pressure.
Chapter 11 Filing and Asset Details
The company initiated a voluntary Chapter 11 sales process to facilitate the transaction, as announced in a statement on Friday. According to court documents submitted in the Southern District of New York, Sleep Number listed assets between US$500 million and US$1 billion, with liabilities ranging from US$1 billion to US$10 billion.
Debtor-in-Possession Financing
As part of the deal, Sleep Number expects to secure up to US$260 million in debtor-in-possession financing, including up to US$65 million in new financing. This cash is intended to support operations during the court-supervised process, covering wages and supplier payments.
Financial Struggles and Market Pressures
Sleep Number has faced declining store traffic, tariffs, and broader industry pressures. Despite slashing adjusted operating expenses by US$136 million last year, the company could not offset a 16% drop in sales. Over the past four months, shares have plummeted approximately 95% as its financial situation deteriorated.
The company stated it would continue reviewing its footprint with the goal of retaining as many retail locations as possible.
