Lights Out: Sleep Number Files for Chapter 11 Bankruptcy in New York

On Friday, June 12, 2026, Sleep Number filed for ​bankruptcy in the Southern District of New York, docket #26-11399.  According to  Reuters, the company plans to sell its assets under a $415 ‌million buyout offer from Canadian bedding company Sleep Country Canada Inc. Sleep Number has 572 retail stores in the U.S.

Interestingly, Reuters reports the company recently entered into a sponsorship agreement with National Football League star Travis Kelce, fiancé of Taylor Swift, which made Mr. Kelce a top shareholder with a 5% stake in the company. It was not clear how the sponsorship ⁠agreement would ​be treated in the bankruptcy.

The company enters bankruptcy with $672 million in debt, blaming tariffs and inflation for the filing. An auction is scheduled for July 13, but the company is open to higher and better offers.

For shopping center owners and landlords, this filing raises immediate and practical concerns: rent payments, lease assumption or rejection, the auction, and the long-term viability of the space.

Why This Matters to Shopping Center Owners

Retail bankruptcies like Sleep Number’s illustrate how fast a case can proceed for landlords. Here the auction is currently scheduled for July 13, less than a month away.

Early, informed action can significantly affect a landlord’s recovery and leverage.

Sleep Number joins a growing list of retailers seeking bankruptcy protection this year, as companies navigate restructuring to optimize value for stakeholders.

How Stark & Stark Helps Landlords Navigate Retail Bankruptcies

If you are a shopping center owner or landlord with one or more of the 500 Sleep Number locations, understanding your rights—and exercising them strategically—is critical.

Stark & Stark’s Shopping Center and Retail Development Group regularly represents landlords nationwide in major retail Chapter 11 cases, including in the Southern District of New York, District of New Jersey, District of Delaware, and other key jurisdictions.

Most recently, our Group has represented landlords and trade creditors in the Value City Furniture, TGI Friday’s, Express, Rite Aid, Big Lots, Party City, Bed Bath & Beyond, David’s Bridal, and Sports Authority Chapter 11 bankruptcy cases. We focus exclusively on protecting landlord interests—helping owners preserve cash flow, minimize vacancy risk, and position assets for long-term stability.

Click here to see the list of 10 Retailers to Watch for a Possible Bankruptcy in 2026

For more information on how Stark & Stark can assist you, please contact shareholders Thomas Onder at (609) 219-7458 (tonder@stark-stark.com) or Joseph Lemkin at (609) 791-7022 (jlemkin@stark-stark.com).