Sleep Number enters Chapter 11 reorganization and asset sale

• The Minneapolis-based smart-bed retailer entered court protection with $672.5 million in debt, citing rising inflation and tariff disruptions.
• Sleep Country Canada agreed to buy substantially all of Sleep Number's assets for $415 million in cash, acting as the baseline bidder.
• Sleep Number expects to run its 572 retail locations normally, honoring all customer warranties and connected app services during the restructuring.

Smart-bed manufacturer Sleep Number (NASDAQ:SNBR) filed for Chapter 11 bankruptcy protection on Thursday with $672.5 million in debt.

Court filings cite inflation and supply chain disruptions caused by international tariff policies as primary drivers for the financial restructuring.

Sleep Country Canada will serve as the stalking horse bidder for a court-supervised auction scheduled on July 13.

Following the announcement, Sleep Number's share price was down at $0.23.

The company reported a first-quarter net loss of $50 million on sales of $319 million in May.

Filings show management expects to fund ongoing operations and honor warranties through a $260 million financing package.