A decline in U.S. wholesale shipments of mattresses in the first quarter of 2026, falling 8% in units and 3.8% in dollar value, according to the International Sleep Products Association, has impacted the mattress market, as well as the fashion bedding sector, or soft goods industry.
“While underlying demand remains constrained, pricing and product mix continue to provide some offset, with average unit selling prices increasing at a mid-single-digit rate,” the International Sleep Products Association said in a statement.
A challenging retail market, which has impacted demand for products, combined with financial issues involving affiliated companies has forced a soft goods supplier Simply Interior Homes to file for bankruptcy protection.
Simply Interior Homes files bankruptcy
Simply Interior Homes LLC, which designs, sources and supplies home textiles and home décor products for major retailers and designers, such as Kate Spade, filed for Chapter 11 bankruptcy to reorganize its business and seek a sale of its assets.
The Rock Hill, S.C.-based debtor filed its petition on June 8 in the U.S. Bankruptcy Court for the District of Delaware , listing $100 million to $500 million in assets and $100 million to $500 million in liabilities, after financial disagreements with the company’s founding parent Centre Lane Partners and affiliate Live Comfortably forced it to file for bankruptcy, according to court papers.
The debtor was formed in early 2025 when Centre Lane Partners carved out the soft goods business from affiliate Keeco LLC, which had a term loan facility in default at the time, created the new Simply Interior Homes entity, and rebranded Keeco as Live Comfortably.
Debtor blames parent
The debtor blamed its bankruptcy filing on an undercapitalized balance sheet from the beginning of the business carve-out, the failure of multiple recapitalization, merger and acquisition, and refinancing efforts led by Centre Lane Partners, and the parent company’s refusal to provide necessary liquidity and capital support to Simply Interior Homes in the face of such failed transactions, according to court papers.
A spokesperson from Centre Lane Partners was not immediately available for comment.
“I have been advised by SIH’s management team that due to the negative change in the opening financial position of the debtors and Keeco’s prior fill rate failures, the newly hired management of the debtors were required to immediately revise the debtor’s revenue plan for 2025 from $185 million ultimately down to $86 million,” Simply Interior Homes‘ Chief Restructuring Officer Adam Zalev said in a declaration.
“In sum, the debtors began their existence as an undercapitalized business with a damaged customer base, excess and obsolete inventory, no cash, and more debt and payables than anticipated, creating fundamental deficits from which the debtors operated for more than a year but from which they were never able to fully recover,” Zalev said.
A major financial burden on Simply Interior Homes was a transition services agreement that it entered into with Live Comfortably in 2024 that handed over back-office and certain operational functions to Live Comfortably, including information technology, finance and accounting services that included accounts receivable, accounts payable, corporate accounting, financial planning and analysis, tax compliance and treasury functions.
Due to delays in a formal name change through the Internal Revenue Service, the debtors’ setup of new vendor accounts with major customers was delayed, forcing it to rely on Live Comfortably to receive and remit to the debtor customer payments throughout 2025 and 2026, according to court papers.
Debtor says affiliate held back payments
Live Comfortably allegedly delayed remitting payments to Simply Interior Homes despite the debtor’s repeated demands for timely remittance, court papers said. The debtor’s customers remitted more than 75% of Simply Interior Homes’ collections to Live Comfortably bank accounts from January to May 2026, with amounts ranging from $300,000 to $1.5 million per week.
In the week ended May 31, 2026, Live Comfortably allegedly received $311,000 in payments from the debtor’s customers that were expected to be remitted to the debtor in a timely manner, but as of June 7, Live Comfortably had not sent the funds to the debtor, court papers said.
Agreement led to high annual charges
The debtor said it remains dependent on services provided by Live Comfortably and has not completed the transition to fully independent, standalone operations. Under the transition services agreement, the debtor also faces a substantial cost burden that includes annual charges over $2.7 million.
The debtor and Live Comfortably allegedly became involved in a dispute over amounts owed under the transition services agreement, with Live Comfortably threatening to terminate the agreement and terminate the services provide to the debtor, which prompted the Chapter 11 bankruptcy filing.