It's a tough time to be in the mattress business. The industry's woes began last year when people stopped buying homes, the economy fell into a recession and the stock market tanked. With thinner wallets and no new homes to furnish, consumers became decidedly wary about buying plush mattresses to plump up their rapidly depreciating McMansions.

Simmons, as a result, is the latest mattress company to run into the equivalent of a business nightmare. The maker of Beautyrest and ComforPedic mattresses said Friday it will file for Chapter 11 bankruptcy protection, a filing that spokesman Michael Henson said will likely come in the next 30 to 60 days.

"With the financial markets being frozen, credit unavailable in December of last year, and consumer demand completely drying up, it was a perfect storm for the company," explains Henson.

Closely held Simmons is to be acquired by a rival, the maker of Serta brand mattresses. Under the restructuring plan, Ares Management and Teachers' Private Capital, which own Serta-maker National Bedding Company, said they will keep Simmons a separate company and retain its brands. The plan will reduce Simmons' indebtedness from about $1 billion to $450 million. Much of the debt stemmed from private equity firm Thomas H. Lee Partners' purchase of Simmons in 2003.

Simmons isn't the only mattress company to be affected by the downturn. Dial-a-Mattress, which owned the 1-800-Mattress jingle, said in March that it had filed for bankruptcy protection and would sell to rival Sleepy's.

According to the trade group International Sleep Products Association, sales of mattresses slipped 9.1 percent last year to $6.24 billion. It was the industry's worst performance since sales started to be tracked in the 1970s, says Henson. And sales don't appear to be picking up in 2009, according to ISPA's tracking of 18 U.S. mattress producers, accounting for about 46 percent of unit sales. Units sales plunged 18.5 percent in January, although they have rebounded somewhat to a mere 7.6 percent decline in August. With existing housing sales unexpectedly declining 2.7 percent last month, it's unclear when demand for mattresses may pick up.

In the meantime, with the pinch of the recession lingering, a plush $3,400 king-size Beautyrest mattress remains something most consumers can only dream about.