Eve Sleep issues profit warning after proposed merger collapses

Eve Sleep published its full-year financial results for the year ending 31 December 2019, posting a statutory loss of £12.1m however it saw an increase in its gross margin figures.
Trading for Eve Sleep in the first two months of 2020 was in line with expectations.
// Eve Sleep’s proposed merger with fellow mattress retailer Simba collapses
// The retailer has issued a profit warning
// 2019 revenues are likely to be in the range of £25 million to £27 million

Eve Sleep has issued a profit warning after its proposed merger with Simba collapsed.

Its 2019 revenues are likely to be in the range of £25 million to £27 million, which in turn would ”have some flow throw to the EBITDA loss”.

The mattress in a box retailer said the collapse was mainly down to “challenging” trading and an uncertain economic outlook, as well as heavy discounting.

Eve Sleep’s proposed merger with Simba was announced in August.

READ MORE: Eve Sleep sales continue to fall despite 50% slash in losses

The retailer said its board “decided that now is not the right time to pursue the potential merger and that it is more appropriate to focus on the Eve rebuild plan”.

Eve Sleep said its focus “in recent months” had been on its new marketing strategy, which it said has raised its brand awareness from 10 per cent to 50 per cent since the start of the year.

“We have continued to make progress with our rebuild strategy and have taken action to reduce our cost base, including a significant reduction in administrative expenses compared to 2018 along with a refocused and reduced marketing investment strategy removing inefficient activity,” Eve Sleep chief executive James Sturrock said.

“The opportunity to create a leading sleep wellness brand remains undiminished and I am confident that Eve’s rebuild strategy.

“We will continue to examine ways of accelerating Eve’s rebuild strategy and the move to profitability, through organic and inorganic growth.”

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