Sleep Number Files for Bankruptcy With Plans to Combine With Sleep Country Canada — Update

By Colin Kellaher

Mattress maker Sleep Number has filed for chapter 11 bankruptcy with a deal in hand to be acquired by Sleep Country Canada for $415 million.

Sleep Number said Sleep Country Canada, which was taken private in 2024 by Canadian insurance-focused conglomerate Fairfax Financial, has agreed to act as the stalking horse, or lead, bidder in a bankruptcy court-supervised sale process for the Minneapolis company.

Sleep Number said its stores will remain open and operating during their regular business hours and that its online channel is accepting new orders during the bankruptcy process, adding that it expects to secure up to $260 million of debtor-in-possession financing to support its business.

The Wall Street Journal earlier this month reported that Sleep Number was preparing to file for bankruptcy as it grappled with a high debt burden and deteriorating financial performance, and that it was aiming to use the chapter 11 process to complete a reorganization that would keep its business intact.

Shareholders are generally wiped out in bankruptcy cases, and Sleep Number on Friday said that based on the purchase price in the Sleep Country Canada agreement, its common shares are significantly out of the money and would likely have no recovery.

Sleep Number shares were recently changing hands at 41 cents, down 38% on the day and 97% below their 52-week high of $13.94 reached in February.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

June 12, 2026 11:17 ET (15:17 GMT)