General
What did Sleep Number announce?
- Sleep Number has entered into an agreement to combine with Sleep Country to create a leading North American mattress and bedding company.
- The transaction will enable the combined company to provide consumers across the United States and Canada a broader assortment of innovative sleep products and services in stores and online.
- To facilitate the combination, Sleep Number initiated a voluntary Chapter 11 sale process.
- We are confident that the steps we are taking will enable us to expand our reach, improve our financial position by substantially reducing our debt, and help more people achieve their best sleep.
- During this process, Sleep Number’s operations are continuing as normal.
- Customers can continue to shop for the company’s products online and in stores nationwide.
Why did Sleep Number initiate this court-supervised sale process? Why now?
- Like many companies, Sleep Number had a significant demand spike during the pandemic and pursued a strategy that over expanded its cost structure, including store footprint, manufacturing capabilities and debt levels.
- While the company has been managing this debt load for several years now, it has become unsustainable. We continue to execute our turnaround plan, and this process allows us to manage that more quickly and with more certainty.
- Our agreement with Sleep Country represents the next step forward in our work to strengthen the foundation of our business as we continue executing our turnaround plan.
- As we have shared publicly, over the last several months, Sleep Number has worked with external advisors to conduct a comprehensive evaluation of our strategic options and a robust sale process.
- Through this work, we determined that entering this agreement with Sleep Country and initiating a court-supervised sale process is the best and quickest path forward to address our financial constraints and position our business for future growth.
- We are confident that the steps we are taking will enable us to expand our reach, improve our financial position by substantially reducing our debt, and help more people achieve their best sleep.
How will this process affect Sleep Number’s day-to-day operations?
- This process does not impact day-to-day operations. We are operating as normal.
- Sleep Number is focused on serving its customers and helping them achieve their best sleep.
- Customers can continue to shop for the company’s products online and in stores nationwide.
- We are fulfilling and delivering orders and honoring our 100-night trial, warranties, gift cards, Sleep Number Rewards points and store credits.
- The Sleep Number app is also continuing to help people achieve quality sleep.
- Across the company, we are focused on advancing our Sleep Number Shifts turnaround strategy centered on our new product line, marketing and distribution, while staying disciplined in the work that enables it.
Does Sleep Number have sufficient liquidity to continue operating?
- Yes. In connection with this process, Sleep Number has received interim approval from the Court to access up to $260 million of debtor-in-possession (“DIP”) financing, including up to $65 million in new financing.
- This DIP financing, combined with cash generated from Sleep Number’s ongoing operations, is expected to support the business during the court-supervised process.
Who is Sleep Country? Why are they the right buyer for Sleep Number?
- Headquartered in Brampton (near Toronto), Ontario, Sleep Country is Canada’s largest sleep brand.
- Through its portfolio of brands, including Sleep Country, Dormez-vous, Endy, Silk & Snow and Hush, the company offers a broad assortment of mattresses, bedding, furniture and sleep wellness products.
- The company also has relationships with innovative sleep brands, including UK-based Simba Sleep, helping expand access to sleep solutions across multiple markets, and Casper, whose Canadian operations were acquired by Sleep Country in 2023.
- We have had the opportunity to get to know the Sleep Country management team well through this process and see firsthand how complementary our businesses, cultures and values are.
- 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 support the wellbeing of our customers through every stage of their sleep wellness journey.
How will the sale be conducted?
- We are conducting the sale under section 363 of the U.S. Bankruptcy Code.
- The agreement we have reached with Sleep Country, which is known as a “stalking horse bid,” is the first step in this process.
- Other interested parties will have an opportunity to submit bids for all or part of the business.
- If other qualified bids are received, an auction will then be held. The Sleep Country stalking horse bid will serve as the floor for that auction.
- The winning bidder will be the one that we determined to have submitted the highest or otherwise best bid, subject to Court approval.
What are the next steps? When does Sleep Number expect to complete the court-supervised process?
- We intend to move through this process as quickly and efficiently as possible.
- Additional information will be available in our court filings, including our First Day Declaration.
Will there be any store closures as a result of this process?
- Improving our operational efficiency is a core tenet of our turnaround plan, and one of our goals in this process is to continue the work we are already doing around optimizing our store footprint.
- Our goal over the past year has been to streamline our store count to better match the size of our business. A key decision through the process is to ensure we reduce potential loss in revenue by ensuring we maintain our high transfer rates from one store to another.
- Our store footprint is one of the most attractive assets for Sleep Country, and our intention is to maintain the vast majority of locations based on profitability.
Customers
Can customers continue to shop with Sleep Number? What does the court-supervised process mean for customers?
- We are operating as normal as we take these steps.
- Customers can continue to shop for the company’s products online and in stores nationwide.
- We are fulfilling and delivering orders, standing behind our 100-night trial and honoring our warranties, gift cards, Sleep Number Reward points and store credits.
- The Sleep Number app is also continuing to help people achieve quality sleep.
- We remain as focused as ever on helping you achieve your best sleep.
What will a combination with Sleep Country mean for customers?
- Customers will continue to experience the same Sleep Number products, services and support they know today.
- Our combination with Sleep Country, Canada’s largest sleep brand, would create a leading North American mattress and bedding company.
- Both companies share a strong commitment to helping people achieve their best sleep, and that remains at the center of everything we do.
Will my order be delivered as scheduled?
- All deliveries are still scheduled to be delivered on time. If anything should change, we’ll reach out to you.
Will there be any change in Sleep Number products, services or offerings as a result of the filing?
- No. You can continue to shop for all Sleep Number products online and in stores nationwide.
- The infrastructure supporting Sleep Number’s connected smart beds and App will remain operational as they are today.
Will I still be able to use my gift cards or store credit cards?
- Yes. We are honoring gift cards and store credit cards during the process.
Can I continue to redeem my Sleep Number points? Will any purchases I make still count toward earning my next reward?
- Yes, Sleep Number Rewards members are able to continue earning and redeeming rewards during this process.
Will there be any change to Sleep Number’s return and exchange policy as a result of this process?
- No, there is no change to Sleep Number’s return and exchange policy.
Is my warranty still valid?
- All warranties, guarantees and other customer programs are being honored as usual.
Through this process, what happens to my warranty?
- Through this process, we are fulfilling and delivering orders and fully expect to continue our day-to-day operations. This includes servicing our warranties.
- You can learn more about our warranty at www.sleepnumber.com/pages/legal-warranty.
What happens to my warranty in the event there is a sale in Chapter 11?
- We are operating as normal as we go through this process, including by servicing our warranties.
- If the company is sold during the Chapter 11 process, we expect warranties to continue to be serviced, as is provided for in the asset purchase agreement that has been filed with the Court.
- You can learn more about our warranty at www.sleepnumber.com/pages/legal-warranty.
Should I be worried about long-term coverage?
- No. We are operating as normal as we go through this process. This includes servicing our warranties.
- You can learn more about our warranty at www.sleepnumber.com/pages/legal-warranty.
Vendors / Suppliers
What does this mean for Sleep Number vendors and suppliers?
- We intend to pay vendors and suppliers for goods and services provided on or after the filing date.
- In connection with this process, Sleep Number has received interim approval from the Court to access up to $260 million of debtor-in-possession (“DIP”) financing, including up to $65 million in new financing.
- This DIP financing, combined with cash generated from Sleep Number’s ongoing operations, is expected to support the business during the court-supervised process.
- We are continuing to work with our vendors and suppliers as we take these steps and appreciate your continued support.
Will vendors / suppliers be paid for goods and services provided on or after the filing date?
- Yes. We intend to pay vendors and suppliers for goods and services provided on or after the filing date in the normal course of business and on usual terms.
- In connection with this process, Sleep Number has received interim approval from the Court to access up to $260 million of debtor-in-possession (“DIP”) financing, including up to $65 million in new financing.
- This DIP financing, combined with cash generated from Sleep Number’s ongoing operations, is expected to support the business during the court-supervised process.
Will vendors / suppliers be paid for goods and services delivered prior to the filing date?
- Under U.S. bankruptcy law, unpaid debts for goods and services provided prior to the filing date, also known as “pre-petition claims,” cannot be paid without specific court approval.
- Any pre-petition claims for such goods and services will be addressed as part of the court-supervised process. We sincerely apologize for any inconvenience this may cause.
- If you provided goods or services before the filing date and have not been paid, you can file a proof of claim with the U.S. bankruptcy court. We will provide notice to vendors of any deadline and requirements for filing a claim.
- Information regarding how to file a claim is available on a website hosted by Sleep Number’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.
Do you expect any near-term changes to your need for the solutions / services we provide you?
- We will continue to order goods and services based on the needs of the business and market conditions.
- We are relying on the support of our vendors and suppliers as we continue helping our customers achieve their best sleep.
- We look forward to continuing our partnership to achieve our mutual success.
Where can I obtain additional information about the restructuring?
- Additional information is available on our restructuring website 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 Restructuring Administration LLC (“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.
Shareholders
Will Sleep Number issue quarterly earnings reports / hold investor calls during the restructuring process?
- As part of this process, we will be required to periodically disclose certain financial results.
- We will not issue earnings press releases or hold quarterly conference calls during this process.
What will happen to Sleep Number common stock as a result of the court-supervised sale process?
- It is too early to definitively say what will ultimately happen to Sleep Number’s common stock.
- That said, we do not expect shareholders to receive any recovery at the end of the court-supervised sale process, consistent with legal priorities.
- Please know that our decision to initiate this court-supervised process follows a comprehensive review of strategic options, and the steps we are taking are necessary to position the business for long-term success.
Will Sleep Number common stock continue trading during this process?
- We received a written notice from the Nasdaq notifying us that they have determined to delist Sleep Number’s common stock from trading.
- Trading on Nasdaq of the Company's common stock will be suspended at the beginning of business on June 23, 2026.
- After suspension from trading, the Company’s common stock may be quoted on over-the-counter markets, although we cannot provide any assurance regarding whether the common stock will trade on such markets, whether broker-dealers will provide quotes for the common stock or whether an efficient market for the common stock will develop.
With this transaction, will Sleep Number be a private company?
- Sleep Country is a private company, and following the close of the transaction, Sleep Number will be as well.