The mattress industry is facing a rough wake-up call — reminiscent of Casper’s 2020 IPO flop. With consumer spending pulling back, the industry has endured five consecutive quarters of declining sales. Plus, the industry is suffering from its own COVID-era boom, where many rushed to replace mattresses that are only swapped out every ten years. As a result, once fast-growing mattress brands are now laying off workers, closing factories, and slashing their ad budgets.

• Mattress company stocks like Sleep NumberSNBR
  and PurplePRPL
  have plunged ~37% and ~43% over one year, respectively.
• Sleep Number’s CEO pointed to “elevated interest rates and record-high credit card debt” for constraining purchasing power, saying they’ve squeezed consumers’ wallets, making them “scrutinize [and defer] their spending.”

Tossing and turning: The slowdown in the mattress sector mirrors what’s happening in the fast food and home renovation industries, highlighting yet another area struggling with weaker consumer demand. Despite these challenges, regulators are still cautious about industry consolidation. The FTC recently blocked Tempur Sealy’sTPX

$4B acquisition of Mattress Firm, arguing that such a merger “could result in higher mattress prices, decreased product quality and choice, or reduced innovation.” This regulatory roadblock adds another headache for mattress companies navigating the economic storm. Let’s hope their executives are getting enough sleep.