Sleep Number Corporation filed for Chapter 11 bankruptcy on Thursday and agreed to sell substantially all of its assets to Sleep Country Canada Inc. for $415 million in cash, plus the assumption of certain liabilities.
The Minneapolis-based smart-bed maker filed for bankruptcy in the Southern District of New York with about $672.5 million in debt
Tariffs and inflation were key reasons for its financial troubles. Court filings cited by Reuters say that President Donald Trump’s tariff policies disrupted the company’s international supply chain, increased costs, and hurt profits. In the first quarter of 2026, the company reported net sales of $319 million and a net loss of $50 million, according to a May SEC filing.
Before filing for bankruptcy, the company tried to improve its finances by refinancing debt, closing stores, and reducing its product lineup, CNBC reported. Under the agreement, Sleep Country Canada’s wholly-owned subsidiary SNBR, Inc. will serve as the “stalking horse” bidder in a court-supervised sale process under Section 363 of the Bankruptcy Code. The deal remains open to higher bids, with an auction scheduled for July 13 if a competing offer emerges.