Eve Sleep has seen its shares rally 18 per cent after announcing it will refocus its efforts into key markets scaling back its unsuccessful expansion efforts elsewhere.
The mattress retailer, which welcomed ex-Moonpig managing director James Sturrock as its new chief executive earlier this month, announced this morning that it will overhaul its strategy and refocus on sales in the UK, Ireland and France, while implementing cost cutting drives.
This follows a torrid year for Eve, which saw its previous boss Jas Bagniewski resign in June following a series of damaging “strategic missteps”.
Share prices plummeted 60 per cent in July, after the retailer announced a profit warning and sales well short of analysts’ predictions, growing 63 per cent in the first half of the year compared to expectations of 100 per cent growth.
“As you would expect from a new CEO, James is conducting his own strategic and financial review of the business and I have no doubt given his experience and capabilities, more improvements will be forthcoming,” chairman Paul Pindar said.
“While there is much to be proud of in our first half results, with sales growth of 63%, our group results fell short of our own high expectations.
“We have however taken swift and decisive action, including re-focusing on fewer core markets where we have a leading position and significant growth potential, which has enabled us to reduce costs substantially.”
Investors have hailed the announcement that Eve will move away from non-core markets, which according to Peel Hunt generated around 25 per cent of revenues at a “cost of 60 per cent of the cash burn”.