National Football League tight end Travis Kelce is joining Sleep Number as both an investor and a paid spokesman, the mattress company said, in a partnership designed to broaden the brand's appeal and bring new customers to its stores and online channels.
Under the arrangement, Kelce will acquire a stake of under 5% in Sleep Number and will be featured in the company's national advertising campaign for the next three years. The company said Kelce is purchasing some shares directly and will receive additional restricted stock that vests across the three-year term of the agreement. Sleep Number did not specify how the stake is split between purchased and restricted shares, nor did it disclose the precise size or dollar value of the holding.
Kelce has been a Sleep Number customer since 2019 and has publicly promoted the brand for several years. The company noted the athlete publicly endorsed its products as early as 2020, including a social media photo of him using a Sleep Number 360 smart bed. In a statement quoted by the company, Kelce said becoming an investor felt like a "natural next step" and that the partnership reflected his confidence in the company's direction and the "growing opportunity around sleep."
The partnership adds to Kelce's recent investments in public and private consumer companies. He bought shares in amusement park operator Six Flags Entertainment last year and has stakes in private beverage makers, including Garage Beer and the tequila soda brand Casa Azul. The public response to his earlier investment in Six Flags was notable: shares of that company rose 18% after reports that Kelce had joined activist hedge fund Jana Partners in taking a position in the firm in October.
Sleep Number is pursuing a turnaround under its new chief executive, Linda Findley, who joined the company in April after leadership roles at Blue Apron and Etsy. The company reported that Findley launched a Sleep Number Shifts marketing initiative aimed at revamping the brand's advertising, reaching new customer segments and restoring revenue growth.
Sleep Number closed at $10.30 per share on Tuesday, giving the company a market capitalization of about $235 million, the company said. The mattress maker has faced declining sales amid consumers pulling back on high-ticket discretionary purchases and amid a competitive retail environment. The company stated that Kelce's enthusiasm for sleep and his business experience could accelerate efforts to share Sleep Number's story and attract younger customers to the brand. Findley said in a company statement that Kelce's passion for and awareness of the health benefits of sleep, combined with his business acumen, would be a helpful accelerator as the company seeks to broaden its audience.
The exact commercial terms of Kelce's role as spokesman and the mechanics of his equity stake beyond the vesting schedule were not disclosed. Sleep Number said it expects national advertising featuring Kelce over the next three years, aligning the appearance schedule with the vesting timetable for the restricted stock portion of the agreement.
Analysts and shareholders will watch whether the celebrity partnership helps reverse the company's sales slump and whether the marketing push reaches the younger demographics Sleep Number is targeting. For now, the deal pairs a recognizable sports figure with a brand attempting to navigate a competitive and price-sensitive consumer market.
Context and additional details
- Kelce's stake is stated to be under 5% of Sleep Number; the company did not provide a precise breakdown between purchased shares and restricted stock.
- Kelce has been a Sleep Number user since 2019 and publicly posted about using a Sleep Number 360 smart bed in 2020.
- Sleep Number's new CEO, Linda Findley, started in April and initiated the Sleep Number Shifts campaign to rejuvenate marketing and return the company to growth.
- Sleep Number's recent performance includes declining sales attributed to consumers cutting back on big-ticket purchases and a competitive environment; the company closed at $10.30 and a market capitalization of about $235 million on the most recent trading day referenced.