Eve Sleep to put itself up for sale, miss FY revenue expectations

Eve Sleep said on Monday that it was considering putting itself up for sale as it warned it would miss revenue expectations for year.

The mattress company has launched a strategic review to explore financing options as it looks to accelerate its push into the "wider sleep wellness space".

"In order to deliver our objective of creating the first digital sleep wellness retailer, the board considers that eve would benefit from additional investment," it said.

Eve said it had recently been in talks with a US-based investor about a strategic investment. That party made a preliminary expression of interest in making an offer for the group but talks have since lapsed and the potential investor has withdrawn its interest.

"However, the board believe that it is now in the best interests of all the company’s stakeholders to explore all possible strategic and financing options for the business," it said. "In addition to further external investment in the business, these options may include a potential sale of the company."

Eve also said on Monday that it continues to outperform a market which is estimated for the first four months of 2022 to be down 29% year-on-year in the UK and 37% in France.

Over the five months to 29 May and "against challenging year-on-year comparatives", the company’s direct to consumer sales orders are down 15% in the UK & Ireland and 3% in France. Eve said trading was benefitting from the C4 sponsorship, which runs for 12 months from April 2022 on ‘late nights on 4.’ As a result of this recent progress, sales orders for the direct to consumer business for the last three weeks have grown 2% in the UK year-on-year, and 40% in France.

Nevertheless, Eve warned that based on the first five months of trading and due to the cost-of-living crisis, it no longer expects to meet its previous revenue expectations for the year.

"Eve is, like all direct to consumer businesses, exposed to ongoing weaknesses in the economy, declining consumer confidence and rising inflation, both in the wider consumer landscape and in input prices," it said. "These headwinds are slowing eve’s progress toward its strategic and financial goals."

The group also said that additional promotional activity was having an impact on gross margins.

At 0825 BST, the shares were down 9% at 1.50p.