Eve Sleep shares jump as investors back new strategy
The mattress retailer is cutting costs and focusing on the UK, Ireland and France.
Shares in Eve Sleep jumped on Thursday as investors took comfort in the company’s transformation progress.
The direct-to-consumer retailer, which sells its mattresses online, unveiled interim results for the six months to 30 June showing a 63% increase in revenue, boosting its share price by 17.5% to 20.8p in early trading.
Underlying earnings fell again to a loss of £11.9 million, but analysts praised the group’s shift to focus on core markets the UK and Ireland, and France.
“While we were disappointed to cut revenue forecasts as Eve exits from non-core markets, it is difficult to argue with the rationale as non-core territories generated about 25% of group revenues at a cost of 60% of the cash burn,” said Peel Hunt analyst John Stevenson.
Eve’s former chief executive Jas Bagnieowski exited the business suddenly in July due to “strategic missteps”.
The company had launched in multiple new markets in quick succession but later admitted it had underestimated what would be required to crack Europe.
Shares had crashed 60% on the news of Bagnieowski’s shock departure.
Co-founder Abid Ismail then took the reins on an interim basis to steer the business in a new direction, focusing on core markets.
The company has now withdrawn from all territories other than the UK, Ireland and France.
Earlier this month former Moonpig managing director James Sturrock was appointed chief executive to lead the company into its next phase.
Chairman Paul Pindar said on Thursday: “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.
“The market opportunity remains undiminished and Eve, as the most well-known direct-to-consumer sleep brand, continues to win market share.”
Eve’s new strategy has seen it accelerate new product launches including bed frames, pillows and sheets, as well as partner with the UK’s leading bed retailer Dreams.
It has also initiated a cost savings plan, laying off 20% of staff and planning further initiatives in the second half.