Shares in Eve Sleep surged 30% today as the online mattress retailer launched a fundraising plan and signalled a shift away from heavy marketing.
The news follows co-founder Jas Bagnieowski’s abrupt departure from the company a few months ago, as Eve Sleep conceded that its strategy of expanding quickly overseas had not met expectations.
New chief executive James Sturrock has now completed a business review and wants to build deeper relationships with customers in the retailer’s core markets of France, the UK and Ireland.
To fund the plans, Eve Sleep will raise £15 million of new equity.
The mattress brand said it has already received support from shareholders at a price that is “significantly” higher than the share price.
Eve Sleep would also invest in widening its product range and improving customer service rather than using high levels of marketing to drive one-off purchases.
It said underlying revenues for 2019 would therefore be below current expectations.
News of the plans prompted shares in the firm to shoot up by 30 per cent to a high of 18.9p in early trading.
In mid-morning trading, the share price was 8.6 per cent higher at 15.75p.
“While we have revised our short-term growth ambitions during this period of consolidation and investment, we anticipate a marked improvement moving into 2020 and beyond,” Sturrock said.
“Eve has an exciting future ahead and we look forward to putting the business on a stronger footing and establishing Eve as Europe’s leading sleep and well-being brand.”
Eve Sleep added that a new chief marketing officer is slated to come on board at the end of the year to lead a strategy of lower investment and concentrating on partnerships, public relations and digital marketing.