Sleep Number's Chapter 11 filing and planned sale to Sleep Country Canada underscore the retail sector's vulnerability to tariff-driven cost pressures and supply chain disruption.
Sleep Number (SNBR) filed for Chapter 11 bankruptcy, citing tariffs on imported components that squeezed margins. The company announced a stalking-horse asset sale to Sleep Country Canada. The stock is expected to become virtually worthless as equity is wiped out in bankruptcy proceedings.
SNBR shares are expected to plunge as equity holders typically receive no recovery in Chapter 11. The stock may continue to trade but carries extreme risk, with the company warning existing shares will likely be canceled.
If the sale price exceeds the claims of creditors, which is rare in retail bankruptcies, shareholders could receive a residual payment, but the company indicated existing equity will be wiped out.
The deal aims to keep Sleep Number's stores and brand alive under new ownership, which could preserve jobs and customer warranties, but the transition will be managed under bankruptcy court supervision.
Sleep Number Corp. filed for Chapter 11 bankruptcy protection on June 12, 2026, blaming U.S. tariffs on imported components for making its mattress products uncompetitive. The company has agreed to sell its assets to Canada's Sleep Country Canada in a stalking-horse bid, aiming to maintain operations. The bankruptcy highlights the ongoing impact of trade policy on retail manufacturing.
The company blamed U.S. tariffs on imported components, which increased production costs and made its products less price-competitive, ultimately leading to unsustainable financial losses.
Under Chapter 11, equity holders typically receive little or no recovery. The sale to Sleep Country Canada prioritizes creditors, and existing shares are likely to be canceled.
Sleep Country Canada is a major Canadian mattress retailer. The acquisition would expand its U.S. footprint and could preserve Sleep Number's brand and operations.