Sleep Number, the mattress manufacturer known for its adjustable air beds, has filed for Chapter 11 bankruptcy protection after struggling with a sharp decline in demand following its pandemic-era peak.
The filing comes after the company experienced a $2.18 billion boom during the Covid-19 pandemic, when consumers rushed to upgrade home furnishings. Sleep Country Canada has made a $415 million opening bid for the mattress maker, serving as a stalking horse bidder in the bankruptcy process.
The company's fortunes reversed as the economy reopened and consumer spending shifted away from home goods. Rising interest rates and inflation further pressured discretionary spending on big-ticket items like mattresses, leaving Sleep Number unable to service its debt load.
The bankruptcy highlights the fragility of pandemic-fueled growth stories in the consumer goods sector. Many companies that saw temporary demand spikes are now facing the harsh reality of normalized shopping patterns and higher borrowing costs.
Sleep Country Canada's bid suggests there is still value in the brand, but the company's path forward will depend on whether other suitors emerge during the court-supervised sale process.