Key Takeaways:
- Sleep Number announced Monday it received bankruptcy court approval for its sale to Sleep Country Canada.
- The combination brings together Sleep Number’s 572 U.S. stores and Sleep Country’s 307 Canadian stores, giving the companies more than 800 locations combined.
- Sleep Number stores and online operations continue as normal through the transition.
Sleep Number Corporation announced Monday that it has received bankruptcy court approval for the sale of substantially all of its assets and ongoing business operations to SNBR Inc., a wholly owned subsidiary of Sleep Country Canada.
The approval, issued by the U.S. Bankruptcy Court for the Southern District of New York, follows a competitive auction process and comes after Sleep Country Canada made significant improvements to its original proposal. The transaction remains subject to customary closing conditions and is expected to close by July 31.
The deal combines Sleep Number’s 572 stores across 50 U.S. states with Sleep Country’s 307 corporate-owned stores across Canada. Sleep Country Canada said the acquisition brings its family of brands to more than 800 locations combined, positioning the company as the second largest sleep retailer in the world.
Stewart Schaefer, President and Chief Executive Officer of Sleep Country Canada, called it “a game-changing acquisition” in a statement, pointing to Sleep Number’s brand strength and its people, comfort and innovation. Schaefer said leaders from both organizations worked closely together throughout the transaction process to ensure continuity for customers and support for employees, and that this collaborative approach will continue into integration planning. He added that further details on integration activities and milestones will be shared as plans progress.
Throughout the process, Sleep Number’s day-to-day operations have continued without interruption. The company is serving customers, servicing warranties and delivering mattresses in homes. Stores remain open during regular business hours and SleepNumber.com continues accepting new orders. The company is also honoring its 100-night trial, warranties, gift cards and Sleep Number Reward points, and the infrastructure supporting its connected smart beds and app remains operational.
Linda Findley, President and Chief Executive Officer of Sleep Number, said in a statement that the Court’s approval paves the way to complete the transaction and that Sleep Number and Sleep Country Canada “will build on the strengths that make Sleep Number special.”
Why Sleep Number Filed for Bankruptcy
Sleep Number filed for Chapter 11 protection on June 12 carrying approximately $672.5 million in funded debt against roughly $600 million in total assets, according to EVP and CFO Amy O’Keefe in bankruptcy court documents.
The declaration said tariff pressure on imported components, pandemic-era overexpansion of the company’s store footprint and manufacturing capacity and a stalled search for recapitalization funding drove the filing, and that the restructuring was designed to “position Sleep Number for long-term success.”
After contacting 33 parties about refinancing and receiving no actionable proposals, Sleep Number ran a 14-week prepetition marketing process that reached 53 potential buyers before securing Sleep Country Canada as its stalking horse bidder at $415 million in cash plus assumed liabilities.
Sleep Country Canada, headquartered in Toronto, operates the Sleep Country Canada, Dormez-vous, Endy, Silk & Snow, Hush, Casper Canada and Simba banners.
