Sleep Number filed for Chapter 11 in 2026 — 600 stores, $415M fire sale to Canada

Sleep Number was founded as Select Comfort in 1987 by Bob and JoAnn Walker, selling adjustable air mattresses through a direct-to-consumer model. It grew to 600 retail locations across the US and generated $2.18 billion in revenue during the 2021 pandemic boom. The company renamed to Sleep Number in 2017 and was a Nasdaq-listed public company.

But the pandemic-era demand surge proved temporary. By fiscal 2025, sales had declined 16% as inflation, high interest rates and a cooling housing market reduced spending on big-ticket items. US tariffs on Chinese-made components added tens of millions in costs that could not be passed on to price-sensitive shoppers.

In March 2026, Sleep Number issued a going-concern warning. On June 12, 2026, it filed for Chapter 11 bankruptcy in New York with a stalking-horse agreement to sell to Canada's Sleep Country Canada for $415 million. The filing revealed $28.7 million owed to 11 industry creditors. Sleep Number's stock was delisted from the Nasdaq.

The case shows how a product innovator can be undone by macro forces — tariffs, interest rates, and the end of a pandemic spending spree left no room to restructure.