• by Sarah Mahoney , June 15, 2026

Despite a major new marketing campaign, a brand reset and extensive product innovation, it could be lights out for the Sleep Number Corp. The mattress retailer, which posted a $50 million loss last month, has filed for Chapter 11 bankruptcy protection. And it’s reached a deal to sell its assets to Sleep Country Canada, Canada’s largest mattress company.

Earlier this year, the company launched “To a Good Life’s Sleep,” its first major integrated campaign in several years, which it described as the next phase of the brand's evolution and key to the turnaround plan. It also completed the largest product redesign in nearly a decade and began pruning underperforming stores, which now number 570.

Those efforts, however, weren’t enough to pull off the turnaround effort, with sales in the first quarter falling 19% to $319 million.

Sleep Number’s stores remain open* and the company is honoring warranties, gift cards, store credits and rewards points, as well as the 100-night trial period. Sleep Number’s online operations are also continuing to take orders.

The Minneapolis-based company stands to secure about $260 million in financing through the new arrangement.

“While we have made meaningful progress advancing our turnaround efforts and strengthening our operations, our capital structure remains unsustainable,” said Linda Findley, president and CEO, in a statement.

She added that the court-supervised sale process will position the company to both address financial constraints and potentially even expand the business.

Sleep Number, a 40-year-old brand, is known for introducing technology that allows couples to adjust the same mattress differently, including softness and temperature. It also heavily promoted a partnership with the National Football League, claiming that 80% of NFL players owned a Sleep Number mattress.

In addition to struggling with a punishing debt structure, the company faced the impact of tariffs and a shrinking audience. While the company hit more than $2 billion in annual sales during the pandemic’s mattress boom, years of a constrained real estate market mean fewer people have been moving house, a key factor in mattress replacement cycles.

The International Sleep Products Association reported that dollar sales in the U.S. mattress market declined 3.5% in 2025, while unit sales fell 5.5%, as demand softened and consumers looked to cut back on discretionary purchases.

*A previous version did not make it clear that the company's stores are still open.