Sleep Number, a premium mattress retailer that recently featured NFL star Travis Kelce as an investor and brand ambassador, has received court approval to sell its assets for $701 million. The sale follows a bankruptcy auction where the final price significantly exceeded the initial offer, highlighting a dramatic step in the company's financial restructuring. Canadian retailer Sleep Country emerged as the winning bidder, besting mattress manufacturer Brooklyn Bedding, which served as the backup bidder.
The transaction, approved by a U.S. bankruptcy judge, includes $529.5 million in cash and the assumption of millions of dollars in liabilities such as employee severance costs and contract obligations. The deal is anticipated to close by July 31.
Sleep Number filed for Chapter 11 bankruptcy protection in June, citing approximately $672 million in debt. The company's executives attributed its financial distress to a confluence of factors including tariffs, inflation, declining consumer demand, and supply-chain disruptions. Higher interest rates have also contributed to reduced demand for high-end home furnishings, leading consumers to postpone significant discretionary purchases.
Despite efforts to improve operations, refinance debt, and streamline its product offerings, the company's capital structure was deemed unsustainable. Sleep Number CEO Linda Findley stated that while operational improvements were made, the financial foundation remained unstable.
The acquisition will merge Sleep Number's 572 U.S. stores with Sleep Country's network of over 300 Canadian locations, creating a substantial North American mattress retail presence. Sleep Number currently employs around 2,920 individuals.
Throughout the bankruptcy proceedings, Sleep Number has assured customers that day-to-day operations will continue uninterrupted. Stores are expected to remain open, online sales and deliveries will proceed as normal, and warranties, sleep trials, and smart-bed functionality will be maintained.