Sleep Number files for bankruptcy, inks merger deal

Insight summary

• •Sleep Number filed for bankruptcy to merge with Sleep Country Canada, with the latter as the stalking horse bidder.
• •The company has $1.3 billion in debt and reported a 19% sales decline to $319 million in the latest quarter.
• •Net loss increased from $9 million to $50 million year-over-year due to inventory off-loading and margin contraction.
• •Sleep Number plans to continue operations during bankruptcy and aims to secure $260 million in debtor-in-possession financing.
• •The company operates 572 stores across all 50 U.S. states and employs nearly 3,000 full-time workers.
• •CEO Linda Findley believes the merger will help address financial issues and support expansion domestically and internationally.
• •Analysts note that intense competition and operational burdens necessitate joining a larger group for survival and growth.