Sleep Number’s Shelly Ibach, one of Minnesota’s few female public company CEOs, retiring next year

Sleep Number CEO Shelly Ibach will retire before the company’s annual meeting next spring, an announcement made along with the news that the company lost money in the third quarter.

Ibach, who has been president and CEO since 2012, added board chair to her duties in May 2022. The company announced her retirement along with its third-quarter earnings report on Wednesday.

Sleep Number lost $3.1 million, or 14 cents a share, during the summer months. Revenue declined 10% year over year to $426.6 million, which missed Wall Street expectations.

The company has struggled with comparative numbers since the pandemic, when a surge in home improvement purchases had an outsized positive effect on its results.

Under Ibach’s tenure as a whole, the company strengthened its Sleep Number brand — so much so it changed its name from Select Comfort to match the name of its stores and products. Ibach also moved the company’s headquarters from Plymouth to downtown Minneapolis. The company also signed a licensing deal with the National Football League, among other achievements.

“I am filled with gratitude for my nearly 18 years at Sleep Number and our team members’ unwavering dedication to our mission and purpose, which has led to improving almost 16 million lives through our beloved brand,” Ibach said in a release.

She joined Sleep Number as a marketing executive before being appointed president and CEO.

Ibach will continue to serve as the company’s chair through the annual meeting, when the company will propose that lead independent director Michael Harrison assume the role of executive chair.

Longtime board members Steve Gulis and Brenda Lauderback also announced they will retire at the next annual meeting.

“Throughout her 12-year tenure as CEO, Shelly transformed the company by consistently demonstrating visionary, results-oriented leadership and driving significant business innovation,” Harrison said in a news release. “Her authenticity has inspired the commitment of the entire Sleep Number team to its purpose: to improve the health and wellbeing of society through higher quality sleep.”

Ibach is one of six female CEOs among the companies that make up the Minnesota Star Tribune 50 list of the state’s largest public companies. The others: Corie Barry of Best Buy, Celeste Mastin of H.B. Fuller, Beth Wozniak of nVent, Bethany Owen of Allete and Sheri Dodd of Tactile Medical.

Fortune 500 firms Land O’Lakes and Thrivent also are led by women, Beth Ford and Terry Rasmussen, respectively.

When Ibach became CEO, revenue at Sleep Number was $743 million. In 2023, it was $1.9 billion.

Revenue and earnings peaked in 2021 amid a pandemic surge in home improvements and a renewed focus on the health benefits of quality sleep. But quarterly sales have decreased in nine of the 10 most recent quarters, and Sleep Number has faced pressure from activist shareholders to make changes.

While feature-rich Sleep Number’s smart beds are premium priced, some of its mattresses can be bought for $1,000. The largest, top-of-the-line model with a base is near $10,000.

Sleep Number’s largest shareholder, Stadium Capital, wrote to the board of directors in September 2023 extolling the brand and business model, but it said recent performance had been “obscured by poor execution and ineffective corporate governance from our view.”

Stadium Capital eventually succeeded in adding two people to the Sleep Number board, Stephen Macadam and Hilary Schneider.

Sleep Number reported results after the market closed Wednesday. Shares closed Thursday at $13.70, up 3.6%.