UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):         FEBRUARY 20, 2001


                             SELECT COMFORT CORPORATION
             (Exact name of registrant as specified in its charter)


        MINNESOTA                    0-25121                    41-1597886
(State of Incorporation)      (Commission File Number)       (IRS Employer
                                                             Identification No.)


  6105 TRENTON LANE NORTH
  MINNEAPOLIS, MINNESOTA                                        55442
(Address of principal executive offices)                      (Zip Code)



Registrant's telephone number, including area code: (763) 551-7000





<PAGE>


ITEM 9.  REGULATION FD DISCLOSURE.

        On February 20, 2001,  the registrant  issued a press release  reporting
its results for the fourth  quarter and fiscal year ended  December 30, 2000, as
follows:

                           SELECT COMFORT CORPORATION

                  ANNOUNCES FOURTH QUARTER AND YEAR-END RESULTS

    MINNEAPOLIS, MINN. (February 20, 2001) - Select Comfort Corporation (NASDAQ:
SCSS) announced results for the fourth quarter and year ended December 30, 2000.
For the fourth quarter of 2000,  net sales were $64.1 million  compared to $68.1
million  for the fourth  quarter of 1999.  In line with its  earlier  release on
expected  earnings for the fourth  quarter of 2000,  the company  reported a net
loss of $4.0 million, or $.22 per share, compared to a net loss of $6.0 million,
or $.33 per share,  for the fourth quarter of 1999. The results for both periods
reflect  various  special  charges  related to store  asset  write-downs,  store
closings,  severance costs, consulting fees or other events. After removing such
special  charges,  the net loss for the  fourth  quarter of 2000 would have been
$3.7 million, or $.20 per share, and the net loss for the fourth quarter of 1999
would have been $3.5 million, or $.19 per share.  Comparable store sales for the
fourth  quarter of 2000  increased  by 1%,  following  a decrease  of 3% for the
fourth quarter of 1999.

    For the year ended December 30, 2000, net sales were $270.1 million compared
to $273.8 million in 1999. The company reported a net loss of $16.1 million,  or
$.90 per share, for the year,  compared with a net loss of $8.2 million, or $.45
per share, for 1999. After removing special charges, the net loss for 2000 would
have been $13.5 million, or $.75 per share, and the net loss for 1999 would have
been  $4.9  million,  or $.27 per  share.  Comparable  store  sales for the year
increased by 0.2%, following a prior year increase of 5%.

    Jim Raabe, Select Comfort vice president and CFO, said, "Sales volume in the
fourth  quarter  reflects low mall traffic  during the holiday season as well as
reduced advertising  spending.  Advertising spending was reduced after the first
quarter as the effectiveness of existing  material was increasingly  inefficient
and the  company  worked to develop new  creative  programs.  The

                                       2
<PAGE>

disappointing  volume  trends  have  impacted  both  financial  results and cash
reserves.  We have adopted aggressive cash conservation measures as we have been
working  to  arrange  financing  to  support  working  capital  needs and growth
initiatives.  Fourth  quarter  results also reflect  early  indications  of cost
savings, which will increase in 2001 as implementation costs are completed."

    Bill  McLaughlin,  Select  Comfort  president  and CEO,  said,  "2000  was a
repositioning  year.  New management  established a turn-around  plan focused on
bringing costs in line with sales volumes and dramatically  increasing  consumer
awareness of our innovative product.  The company was restructured to operate as
a single  company,  leveraging  the  strengths  of its three  established  sales
channels  (retail,  direct and  dot.com),  and to capture the  efficiencies  and
leverage of an integrated  marketing effort.  Aggressive cost reduction measures
were taken across the company as non-core  initiatives were terminated and other
operations were rightsized. Marketing efforts in the second half of 2000 focused
on repositioning the company's  product,  brand and marketing message around the
SLEEP NUMBER(R) bed. Tests of new channels of  distribution  designed to further
increase both awareness as well as the  availability of our product to consumers
were successful.

    "The  objectives  of our cost  reduction  efforts  were to make our core bed
business  profitable  at 2000 sales  volumes  and to enable  funding of bold new
awareness  building  programs.  Actions  taken since the  beginning  of 2000 are
expected  to yield  annual  run-rate  improvements  of $15 million or more after
investing  approximately $8 million back into awareness  building  marketing and
media  programs.   Specific  run-rate   improvements  include:

o    Savings  from  termination  of  non-core  business  initiatives,  including
     catalog,  road show and event  marketing,  and  expenses in 2000 related to
     investment  in the  initial  launch of the sofa  sleeper  product  line and
     relaunch of the company's web site;

o    Manufacturing  cost savings from shifting pump assembly from Minneapolis to
     Salt Lake City;

o    Selling expense savings from reducing our sales  infrastructure  by closing
     our direct call center in South  Carolina  and 27  under-performing  retail
     stores, and by streamlining retail management and store staffing levels;

                                       3
<PAGE>

o    Corporate  general and  administrative  expense  savings from reductions in
     corporate staff and consolidating our two Minneapolis offices;

o    Logistics  cost savings from systems and packaging  improvements  to enable
     shipping with Fed Ex as well as UPS;

o    Product cost reductions with equal or superior quality and reduced returns;
     and

o    Promotional discount reductions through improved design and controls."

    McLaughlin continued, "Lack of awareness of our revolutionary product and of
our brand has long been our number one barrier to growth.  Our national  unaided
awareness  is less  than 3%  (versus  20% to 40%  for  the  leading  innerspring
competitors),  and the demographics of our current  customers skew older with an
emphasis on back pain. We set an objective to dramatically increase awareness of
the  importance  of sleep and of the  ability of our product to provide a better
night's sleep.  We plan to appeal to a broader  consumer  audience with the core
benefit of improved sleep.  Our Sleep Number campaign meets these objectives and
is both  entertaining  and clearly  directive to generate traffic to our stores.
This new campaign will be "shouted" on prime time TV and radio,  not "whispered"
in late night and  narrow-reach  mediums as in the past.  This campaign is being
rolled out regionally,  using spot media  purchases,  to balance  investment and
financial performance objectives.

    "Early test results from the Sleep Number campaign are very encouraging with
traffic  in stores  doubling  the  previous  trend.  It is too early to read the
impact on  conversion or sales,  but our past  experience  indicates  that media
driven  inquiries  convert at  significantly  higher  rates than  casual walk by
traffic.  Awareness of the Sleep Number brand is quickly  rivaling  awareness of
the Select Comfort name in initial markets," said McLaughlin.

    The company also  reported  that it has  completed  the  integration  of the
operations of SleepTec, the innovator of the company's sofa sleeper product, and
plans to launch the 2001 models of the Sofa  Sleepaire  Collection  in the third
quarter  of  2001.  "We  have  identified  and  are   implementing   significant
improvements to this product line," said  McLaughlin.  "This product delivers on
our mission of improving  people's lives by providing the best possible  night's
sleep as well as other  consumer  benefits  not  available  with any other  sofa
sleeper."

                                       4
<PAGE>

    McLaughlin noted,  "While well aware of our challenges,  we are proud of our
progress  and  committed  to doing what is  necessary  to give our Sleep  Number
campaign  the  time  in  the  market  that  it  requires.  2000  was a  year  of
repositioning;  2001 is our year to regain  profitability and growth. We feel we
are well positioned to succeed:

o    Our  product and  technology  are the best in the  industry  and quality is
     better than ever.

o    Awareness  has been our number one  barrier to growth and we now believe we
     have a solution.

o    We have an experienced and committed team of employees and  management.  We
     have completed the transition in marketing  leadership from Ted Atkinson to
     Noel Schenker.  We will shortly be transitioning  sales leadership from Ron
     Mayle to the very capable sales channel  leaders that have been  developed.
     Ron  will be  leaving  Select  Comfort  in the  second  quarter  to seek an
     opportunity with broader general management responsibilities.

o    Cost reductions are in place and systems and process improvements are being
     implemented that will lead to further savings.

o    Our  re-energized R&D and product  development  efforts are fueling further
     cost improvements and providing exciting expansion potential."

    Founded in 1987, Select Comfort Corporation is the leader in sleep solutions
technology,  holding 24 U.S.  issued or pending  patents for its  products.  The
company  designs,  manufactures and markets a line of mattresses with adjustable
firmness,  as  well as  foundations  and  sleep  accessories.  Select  Comfort's
products  are  sold  through  three  channels:  i)  330  retail  stores  located
nationwide,  including 25 leased  departments in Bed Bath & Beyond  stores,  ii)
Select Comfort's  national direct sales operations,  and iii) on the Internet at
www.selectcomfort.com.

     Select  Comfort will hold a conference  call to discuss its fourth  quarter
and  year-end  results on  Wednesday,  Feb.  21 at 10:00 a.m.  Central  Time.  A
simultaneous  webcast of the call will be available  in the  Investor  Relations
section of  www.selectcomfort.com.  A digital replay of the conference call will
be accessible  beginning at approximately  12:00 p.m. Central Time on Wednesday,
Feb. 21, through 5:00 p.m. Central Time on Friday,  Feb. 23, 2001. To access the
replay,  please  call  888-568-0906  from  anywhere  in the U. S.  International
callers may dial

                                       5
<PAGE>

402-998-1583.  An archived  replay of the conference  call may
also be accessed after approximately 12:30 p.m. Central Time on Wednesday,  Feb.
21 at www.selectcomfort.com.


    Statements  used in this press release that relate to future plans,  events,
financial results or performance are forward-looking statements as defined under
the Private  Securities  Litigation  Reform Act of 1995.  Actual plans,  events,
results and performance may differ materially from those anticipated as a result
of certain risks and uncertainties, including but not limited to:

o       The company's ability to create product and brand name awareness.

o    The  efficiency   and   effectiveness   of  the  company's   marketing  and
     advertising.

o    The  ability  of the  company to  effectively  and  efficiently  pursue new
     channels of distribution.

o    The performance of the company's existing and new stores.

o    The  ability  of the  company  to  realize  the  benefits  of  cost  saving
     initiatives.

o    The levels of consumer acceptance of the company's product lines.

o    The ability of the company to  continuously  improve its  existing  product
     lines and introduce new products.

o    The  ability  of the  company  to  efficiently  implement  nationwide  home
     delivery and assembly.

o    The ability of the company to secure  debt or equity  financing  to support
     working capital needs and growth initiatives.

o    Economic trends and consumer confidence.

o    Industry competition.

o    The risks and  uncertainties  detailed  from time to time in the  company's
     filings with the SEC,  including the  company's  Annual Report on Form 10-K
     and other periodic reports filed with the SEC.

    The  company  has no  obligation  to  publicly  update or revise  any of the
forward-looking statements that may be in this news release.



                                       6
<PAGE>




                           SELECT COMFORT CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      DECEMBER 30, 2000 AND JANUARY 1, 2000
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>

                                                 THREE MONTHS ENDED      TWELVE MONTHS ENDED
                                               -----------------------  ----------------------
                                                  2000        1999        2000        1999
                                               ----------- -----------  ----------  ----------
<S>                                            <C>         <C>          <C>         <C>

Net sales                                      $  64,075  $   68,104   $ 270,077   $ 273,767
Cost of sales                                     25,021      24,054      98,924      95,107
                                               ----------- -----------  ----------  ----------
   Gross margin                                   39,054      44,050     171,153     178,660
                                               ----------- -----------  ----------  -----------
Operating expenses:
   Sales and marketing                            38,506      42,049     165,960     162,742
   General and administrative                      6,925      10,536      29,211      29,213
   Store closings/asset impairments                  528       1,404       1,952       1,498
                                               ----------- -----------  ----------  ----------
       Total operating expenses                   45,959      53,989     197,123     193,453
                                               ----------- -----------  ----------  ----------
Operating income                                  (6,905)     (9,939)    (25,970)    (14,793)
                                               ----------- -----------  ----------  ----------
Other income (expense):
   Interest income                                   145         460       1,082       1,956
   Interest expense                                  (20)         (8)        (26)        (69)
   Equity in loss of affiliate                         -           -        (642)          -
   Other, net                                         14        (104)        (66)       (116)
                                               ----------- -----------  ----------  ----------
       Other income, net                             139         348         348       1,771
                                               ----------- -----------  ----------  ----------
Net loss before income tax benefit                (6,766)     (9,591)    (25,622)    (13,022)
Income tax benefit                                (2,779)     (3,549)     (9,480)     (4,818)
                                               ----------- -----------  ----------  ----------
Net loss                                       $  (3,987)  $  (6,042)   $(16,142)   $ (8,204)
                                               =========== ===========  ==========  ==========
Net loss per share - diluted                   $   (0.22)  $   (0.33)   $  (0.90)   $  (0.45)
                                               =========== ===========  ==========  ==========
Weighted average shares - diluted                 17,949      18,155      17,848      18,300
                                               =========== ===========  ==========  ==========

</TABLE>



                                       7
<PAGE>



                           SELECT COMFORT CORPORATION
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      DECEMBER 30, 2000, AND JANUARY 1, 2000
                                 (IN THOUSANDS)

                                ASSETS                       2000         1999
                                                         ----------  -----------
 Current assets:
   Cash and cash equivalents                             $   1,498   $    7,441
   Marketable securities                                     3,950      20,129
   Accounts receivable, net of allowance for
    doubtful accounts of $264, and $305, respectively        2,693       1,056
   Inventories                                              11,083      11,451
   Prepaid expenses                                          4,741       4,821
   Income taxes                                                  -       2,579
   Deferred tax assets                                       6,445       6,639
                                                         ----------  -----------
     Total current assets                                   30,410      54,116
                                                         ----------  -----------
 Property and equipment, net                                37,063      34,823
 Deferred tax assets                                        13,789       4,248
 Other assets                                                3,644       2,176
                                                         ----------  -----------
     Total assets                                        $  84,906   $  95,363
                                                         ==========  ===========


                 LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:
   Current maturities of long-term debt                  $      38   $      51
   Accounts payable                                         17,271      15,911
   Accruals:
      Sales returns                                          5,284       5,880
      Warranty costs                                         7,181       5,841
      Compensation, taxes and benefits                       6,238       6,678
   Other                                                     5,291       5,285
                                                         ----------  -----------
     Total current liabilities                              41,303      39,646

 Long-term debt, less current maturities                     2,322          36
 Other liabilities                                           3,609       2,809
                                                         ----------  -----------
     Total liabilities                                      47,234      42,491
                                                         ----------  -----------





 Shareholders' equity:
   Undesignated preferred stock; 5,000,000 shares
     authorized, no shares issued and outstanding                -           -
   Common stock, $.01 par value; 95,000,000 shares
     authorized, 17,962,689  and 17,713,247 shares
     issued and outstanding, respectively                      180         177
   Additional paid-in capital                               79,452      78,513
   Accumulated deficit                                     (41,960)    (25,818)
                                                         ----------  -----------
     Total shareholders' equity                             37,672      52,872
                                                         ----------  -----------

     Total liabilities and shareholders' equity          $  84,906   $  95,363
                                                         ==========  ===========




                                       8
<PAGE>




                           SELECT COMFORT CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      DECEMBER 30, 2000 AND JANUARY 1, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>


                                                                      2000         1999
                                                                   ----------   ----------
<S>                                                                <C>          <C>
Cash flows from operating activities:
 Net income (loss)                                                 $(16,142)    $ (8,204)
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    Depreciation and amortization                                     8,409        6,695
    Loss on disposal of assets and impaired assets                    2,167        1,297
    Deferred tax assets                                              (9,336)      (4,999)
    Change in operating assets and liabilities:
      Accounts receivable, net                                       (1,637)       9,568
      Inventories                                                       640       (1,315)
      Prepaid expenses                                                   80         (773)
      Income taxes                                                    2,579       (3,227)
      Accounts payable                                                1,360        3,832
      Accrued sales returns                                            (596)        (141)
      Accrued warranty costs                                          1,340        1,355
      Accrued compensation, taxes and benefits                         (173)       1,835
      Other accrued liabilities                                        (312)         724
      Other assets                                                      535          147
      Other liabilities                                                 800          863
                                                                    ----------  ----------
        Net cash provided by (used in) operating activities         (10,286)       7,657
                                                                    ----------  ----------

Cash flows used in investing activities:
  Purchases of property and equipment                               (12,084)     (13,663)
  Investment in marketable securities                                16,179      (20,129)
  Investment in affiliate                                              (400)      (2,000)
                                                                    ----------  ----------
        Net cash provided by (used in) investing activities           3,695      (35,792)
                                                                    ----------  ----------

Cash flows from financing activities:
  Principal payments on debt                                            (16)        (872)
  Repurchase of common stock                                              -      (12,692)
  Proceeds from issuance of common stock                                664        3,579
                                                                    ----------  ----------
        Net cash provided by (used in) financing activities             649       (9,985)
                                                                    ----------  ----------
Increase (decrease) in cash and cash equivalents                     (5,943)     (38,120)

Cash and cash equivalents, at beginning of year                       7,441       45,561
                                                                    ----------  ----------
Cash and cash equivalents, at end of year                           $ 1,498     $  7,441
                                                                    ==========  ==========

</TABLE>




                                       9
<PAGE>




                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                              SELECT COMFORT CORPORATION
                                              (Registrant)


Dated:  February 21, 2001                   By   /s/ Mark A. Kimball
                                            ------------------------------------

                                            Title: Senior Vice President
                                            ------------------------------------



                                       10
<PAGE>
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UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):         FEBRUARY 20, 2001

                             SELECT COMFORT CORPORATION
             (Exact name of registrant as specified in its charter)

        MINNESOTA                    0-25121                    41-1597886
(State of Incorporation)      (Commission File Number)       (IRS Employer
                                                             Identification No.)

  6105 TRENTON LANE NORTH
  MINNEAPOLIS, MINNESOTA                                        55442
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code: (763) 551-7000
ITEM 9.  REGULATION FD DISCLOSURE.

        On February 20, 2001,  the registrant  issued a press release  reporting
its results for the fourth  quarter and fiscal year ended  December 30, 2000, as
follows:

                           SELECT COMFORT CORPORATION

                  ANNOUNCES FOURTH QUARTER AND YEAR-END RESULTS

    MINNEAPOLIS, MINN. (February 20, 2001) - Select Comfort Corporation (NASDAQ:
SCSS) announced results for the fourth quarter and year ended December 30, 2000.
For the fourth quarter of 2000,  net sales were $64.1 million  compared to $68.1
million  for the fourth  quarter of 1999.  In line with its  earlier  release on
expected  earnings for the fourth  quarter of 2000,  the company  reported a net
loss of $4.0 million, or $.22 per share, compared to a net loss of $6.0 million,
or $.33 per share,  for the fourth quarter of 1999. The results for both periods
reflect  various  special  charges  related to store  asset  write-downs,  store
closings,  severance costs, consulting fees or other events. After removing such
special  charges,  the net loss for the  fourth  quarter of 2000 would have been
$3.7 million, or $.20 per share, and the net loss for the fourth quarter of 1999
would have been $3.5 million, or $.19 per share.  Comparable store sales for the
fourth  quarter of 2000  increased  by 1%,  following  a decrease  of 3% for the
fourth quarter of 1999.

    For the year ended December 30, 2000, net sales were $270.1 million compared
to $273.8 million in 1999. The company reported a net loss of $16.1 million,  or
$.90 per share, for the year,  compared with a net loss of $8.2 million, or $.45
per share, for 1999. After removing special charges, the net loss for 2000 would
have been $13.5 million, or $.75 per share, and the net loss for 1999 would have
been  $4.9  million,  or $.27 per  share.  Comparable  store  sales for the year
increased by 0.2%, following a prior year increase of 5%.

    Jim Raabe, Select Comfort vice president and CFO, said, "Sales volume in the
fourth  quarter  reflects low mall traffic  during the holiday season as well as
reduced advertising  spending.  Advertising spending was reduced after the first
quarter as the effectiveness of existing  material was increasingly  inefficient
and the  company  worked to develop new  creative  programs.  The

                                       2
disappointing  volume  trends  have  impacted  both  financial  results and cash
reserves.  We have adopted aggressive cash conservation measures as we have been
working  to  arrange  financing  to  support  working  capital  needs and growth
initiatives.  Fourth  quarter  results also reflect  early  indications  of cost
savings, which will increase in 2001 as implementation costs are completed."

    Bill  McLaughlin,  Select  Comfort  president  and CEO,  said,  "2000  was a
repositioning  year.  New management  established a turn-around  plan focused on
bringing costs in line with sales volumes and dramatically  increasing  consumer
awareness of our innovative product.  The company was restructured to operate as
a single  company,  leveraging  the  strengths  of its three  established  sales
channels  (retail,  direct and  dot.com),  and to capture the  efficiencies  and
leverage of an integrated  marketing effort.  Aggressive cost reduction measures
were taken across the company as non-core  initiatives were terminated and other
operations were rightsized. Marketing efforts in the second half of 2000 focused
on repositioning the company's  product,  brand and marketing message around the
SLEEP NUMBER(R) bed. Tests of new channels of  distribution  designed to further
increase both awareness as well as the  availability of our product to consumers
were successful.

    "The  objectives  of our cost  reduction  efforts  were to make our core bed
business  profitable  at 2000 sales  volumes  and to enable  funding of bold new
awareness  building  programs.  Actions  taken since the  beginning  of 2000 are
expected  to yield  annual  run-rate  improvements  of $15 million or more after
investing  approximately $8 million back into awareness  building  marketing and
media  programs.   Specific  run-rate   improvements  include:

o    Savings  from  termination  of  non-core  business  initiatives,  including
     catalog,  road show and event  marketing,  and  expenses in 2000 related to
     investment  in the  initial  launch of the sofa  sleeper  product  line and
     relaunch of the company's web site;

o    Manufacturing  cost savings from shifting pump assembly from Minneapolis to
     Salt Lake City;

o    Selling expense savings from reducing our sales  infrastructure  by closing
     our direct call center in South  Carolina  and 27  under-performing  retail
     stores, and by streamlining retail management and store staffing levels;

                                       3
o    Corporate  general and  administrative  expense  savings from reductions in
     corporate staff and consolidating our two Minneapolis offices;

o    Logistics  cost savings from systems and packaging  improvements  to enable
     shipping with Fed Ex as well as UPS;

o    Product cost reductions with equal or superior quality and reduced returns;
     and

o    Promotional discount reductions through improved design and controls."

    McLaughlin continued, "Lack of awareness of our revolutionary product and of
our brand has long been our number one barrier to growth.  Our national  unaided
awareness  is less  than 3%  (versus  20% to 40%  for  the  leading  innerspring
competitors),  and the demographics of our current  customers skew older with an
emphasis on back pain. We set an objective to dramatically increase awareness of
the  importance  of sleep and of the  ability of our product to provide a better
night's sleep.  We plan to appeal to a broader  consumer  audience with the core
benefit of improved sleep.  Our Sleep Number campaign meets these objectives and
is both  entertaining  and clearly  directive to generate traffic to our stores.
This new campaign will be "shouted" on prime time TV and radio,  not "whispered"
in late night and  narrow-reach  mediums as in the past.  This campaign is being
rolled out regionally,  using spot media  purchases,  to balance  investment and
financial performance objectives.

    "Early test results from the Sleep Number campaign are very encouraging with
traffic  in stores  doubling  the  previous  trend.  It is too early to read the
impact on  conversion or sales,  but our past  experience  indicates  that media
driven  inquiries  convert at  significantly  higher  rates than  casual walk by
traffic.  Awareness of the Sleep Number brand is quickly  rivaling  awareness of
the Select Comfort name in initial markets," said McLaughlin.

    The company also  reported  that it has  completed  the  integration  of the
operations of SleepTec, the innovator of the company's sofa sleeper product, and
plans to launch the 2001 models of the Sofa  Sleepaire  Collection  in the third
quarter  of  2001.  "We  have  identified  and  are   implementing   significant
improvements to this product line," said  McLaughlin.  "This product delivers on
our mission of improving  people's lives by providing the best possible  night's
sleep as well as other  consumer  benefits  not  available  with any other  sofa
sleeper."

                                       4
McLaughlin noted,  "While well aware of our challenges,  we are proud of our
progress  and  committed  to doing what is  necessary  to give our Sleep  Number
campaign  the  time  in  the  market  that  it  requires.  2000  was a  year  of
repositioning;  2001 is our year to regain  profitability and growth. We feel we
are well positioned to succeed:

o    Our  product and  technology  are the best in the  industry  and quality is
     better than ever.

o    Awareness  has been our number one  barrier to growth and we now believe we
     have a solution.

o    We have an experienced and committed team of employees and  management.  We
     have completed the transition in marketing  leadership from Ted Atkinson to
     Noel Schenker.  We will shortly be transitioning  sales leadership from Ron
     Mayle to the very capable sales channel  leaders that have been  developed.
     Ron  will be  leaving  Select  Comfort  in the  second  quarter  to seek an
     opportunity with broader general management responsibilities.

o    Cost reductions are in place and systems and process improvements are being
     implemented that will lead to further savings.

o    Our  re-energized R&D and product  development  efforts are fueling further
     cost improvements and providing exciting expansion potential."

    Founded in 1987, Select Comfort Corporation is the leader in sleep solutions
technology,  holding 24 U.S.  issued or pending  patents for its  products.  The
company  designs,  manufactures and markets a line of mattresses with adjustable
firmness,  as  well as  foundations  and  sleep  accessories.  Select  Comfort's
products  are  sold  through  three  channels:  i)  330  retail  stores  located
nationwide,  including 25 leased  departments in Bed Bath & Beyond  stores,  ii)
Select Comfort's  national direct sales operations,  and iii) on the Internet at
www.selectcomfort.com.

     Select  Comfort will hold a conference  call to discuss its fourth  quarter
and  year-end  results on  Wednesday,  Feb.  21 at 10:00 a.m.  Central  Time.  A
simultaneous  webcast of the call will be available  in the  Investor  Relations
section of  www.selectcomfort.com.  A digital replay of the conference call will
be accessible  beginning at approximately  12:00 p.m. Central Time on Wednesday,
Feb. 21, through 5:00 p.m. Central Time on Friday,  Feb. 23, 2001. To access the
replay,  please  call  888-568-0906  from  anywhere  in the U. S.  International
callers may dial

                                       5
402-998-1583.  An archived  replay of the conference  call may
also be accessed after approximately 12:30 p.m. Central Time on Wednesday,  Feb.
21 at www.selectcomfort.com.

    Statements  used in this press release that relate to future plans,  events,
financial results or performance are forward-looking statements as defined under
the Private  Securities  Litigation  Reform Act of 1995.  Actual plans,  events,
results and performance may differ materially from those anticipated as a result
of certain risks and uncertainties, including but not limited to:

o       The company's ability to create product and brand name awareness.

o    The  efficiency   and   effectiveness   of  the  company's   marketing  and
     advertising.

o    The  ability  of the  company to  effectively  and  efficiently  pursue new
     channels of distribution.

o    The performance of the company's existing and new stores.

o    The  ability  of the  company  to  realize  the  benefits  of  cost  saving
     initiatives.

o    The levels of consumer acceptance of the company's product lines.

o    The ability of the company to  continuously  improve its  existing  product
     lines and introduce new products.

o    The  ability  of the  company  to  efficiently  implement  nationwide  home
     delivery and assembly.

o    The ability of the company to secure  debt or equity  financing  to support
     working capital needs and growth initiatives.

o    Economic trends and consumer confidence.

o    Industry competition.

o    The risks and  uncertainties  detailed  from time to time in the  company's
     filings with the SEC,  including the  company's  Annual Report on Form 10-K
     and other periodic reports filed with the SEC.

    The  company  has no  obligation  to  publicly  update or revise  any of the
forward-looking statements that may be in this news release.

                                       6
SELECT COMFORT CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      DECEMBER 30, 2000 AND JANUARY 1, 2000
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED      TWELVE MONTHS ENDED
                                               -----------------------  ----------------------
                                                  2000        1999        2000        1999
                                               ----------- -----------  ----------  ----------
Net sales                                      $  64,075  $   68,104   $ 270,077   $ 273,767
Cost of sales                                     25,021      24,054      98,924      95,107
                                               ----------- -----------  ----------  ----------
   Gross margin                                   39,054      44,050     171,153     178,660
                                               ----------- -----------  ----------  -----------
Operating expenses:
   Sales and marketing                            38,506      42,049     165,960     162,742
   General and administrative                      6,925      10,536      29,211      29,213
   Store closings/asset impairments                  528       1,404       1,952       1,498
                                               ----------- -----------  ----------  ----------
       Total operating expenses                   45,959      53,989     197,123     193,453
                                               ----------- -----------  ----------  ----------
Operating income                                  (6,905)     (9,939)    (25,970)    (14,793)
                                               ----------- -----------  ----------  ----------
Other income (expense):
   Interest income                                   145         460       1,082       1,956
   Interest expense                                  (20)         (8)        (26)        (69)
   Equity in loss of affiliate                         -           -        (642)          -
   Other, net                                         14        (104)        (66)       (116)
                                               ----------- -----------  ----------  ----------
       Other income, net                             139         348         348       1,771
                                               ----------- -----------  ----------  ----------
Net loss before income tax benefit                (6,766)     (9,591)    (25,622)    (13,022)
Income tax benefit                                (2,779)     (3,549)     (9,480)     (4,818)
                                               ----------- -----------  ----------  ----------
Net loss                                       $  (3,987)  $  (6,042)   $(16,142)   $ (8,204)
                                               =========== ===========  ==========  ==========
Net loss per share - diluted                   $   (0.22)  $   (0.33)   $  (0.90)   $  (0.45)
                                               =========== ===========  ==========  ==========
Weighted average shares - diluted                 17,949      18,155      17,848      18,300
                                               =========== ===========  ==========  ==========
7
SELECT COMFORT CORPORATION
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      DECEMBER 30, 2000, AND JANUARY 1, 2000
                                 (IN THOUSANDS)

                                ASSETS                       2000         1999
                                                         ----------  -----------
 Current assets:
   Cash and cash equivalents                             $   1,498   $    7,441
   Marketable securities                                     3,950      20,129
   Accounts receivable, net of allowance for
    doubtful accounts of $264, and $305, respectively        2,693       1,056
   Inventories                                              11,083      11,451
   Prepaid expenses                                          4,741       4,821
   Income taxes                                                  -       2,579
   Deferred tax assets                                       6,445       6,639
                                                         ----------  -----------
     Total current assets                                   30,410      54,116
                                                         ----------  -----------
 Property and equipment, net                                37,063      34,823
 Deferred tax assets                                        13,789       4,248
 Other assets                                                3,644       2,176
                                                         ----------  -----------
     Total assets                                        $  84,906   $  95,363
                                                         ==========  ===========

                 LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:
   Current maturities of long-term debt                  $      38   $      51
   Accounts payable                                         17,271      15,911
   Accruals:
      Sales returns                                          5,284       5,880
      Warranty costs                                         7,181       5,841
      Compensation, taxes and benefits                       6,238       6,678
   Other                                                     5,291       5,285
                                                         ----------  -----------
     Total current liabilities                              41,303      39,646

 Long-term debt, less current maturities                     2,322          36
 Other liabilities                                           3,609       2,809
                                                         ----------  -----------
     Total liabilities                                      47,234      42,491
                                                         ----------  -----------

 Shareholders' equity:
   Undesignated preferred stock; 5,000,000 shares
     authorized, no shares issued and outstanding                -           -
   Common stock, $.01 par value; 95,000,000 shares
     authorized, 17,962,689  and 17,713,247 shares
     issued and outstanding, respectively                      180         177
   Additional paid-in capital                               79,452      78,513
   Accumulated deficit                                     (41,960)    (25,818)
                                                         ----------  -----------
     Total shareholders' equity                             37,672      52,872
                                                         ----------  -----------

     Total liabilities and shareholders' equity          $  84,906   $  95,363
                                                         ==========  ===========

                                       8
SELECT COMFORT CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      DECEMBER 30, 2000 AND JANUARY 1, 2000
                                 (IN THOUSANDS)
2000         1999
                                                                   ----------   ----------
Cash flows from operating activities:
 Net income (loss)                                                 $(16,142)    $ (8,204)
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    Depreciation and amortization                                     8,409        6,695
    Loss on disposal of assets and impaired assets                    2,167        1,297
    Deferred tax assets                                              (9,336)      (4,999)
    Change in operating assets and liabilities:
      Accounts receivable, net                                       (1,637)       9,568
      Inventories                                                       640       (1,315)
      Prepaid expenses                                                   80         (773)
      Income taxes                                                    2,579       (3,227)
      Accounts payable                                                1,360        3,832
      Accrued sales returns                                            (596)        (141)
      Accrued warranty costs                                          1,340        1,355
      Accrued compensation, taxes and benefits                         (173)       1,835
      Other accrued liabilities                                        (312)         724
      Other assets                                                      535          147
      Other liabilities                                                 800          863
                                                                    ----------  ----------
        Net cash provided by (used in) operating activities         (10,286)       7,657
                                                                    ----------  ----------

Cash flows used in investing activities:
  Purchases of property and equipment                               (12,084)     (13,663)
  Investment in marketable securities                                16,179      (20,129)
  Investment in affiliate                                              (400)      (2,000)
                                                                    ----------  ----------
        Net cash provided by (used in) investing activities           3,695      (35,792)
                                                                    ----------  ----------

Cash flows from financing activities:
  Principal payments on debt                                            (16)        (872)
  Repurchase of common stock                                              -      (12,692)
  Proceeds from issuance of common stock                                664        3,579
                                                                    ----------  ----------
        Net cash provided by (used in) financing activities             649       (9,985)
                                                                    ----------  ----------
Increase (decrease) in cash and cash equivalents                     (5,943)     (38,120)

Cash and cash equivalents, at beginning of year                       7,441       45,561
                                                                    ----------  ----------
Cash and cash equivalents, at end of year                           $ 1,498     $  7,441
                                                                    ==========  ==========
9
SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                              SELECT COMFORT CORPORATION
                                              (Registrant)

Dated:  February 21, 2001                   By   /s/ Mark A. Kimball
                                            ------------------------------------

                                            Title: Senior Vice President
                                            ------------------------------------

                                       10