Eve Sleep lays blame for tre­bling of losses on its rapid ex­pan­sion

The Daily Telegraph - Business - - Business - Ash­ley Arm­strong By

IN­VESTORS in Eve Sleep are due for more sleep­less nights as losses have tre­bled at the mat­tress com­pany, which has lost more than a fifth of its value since float­ing four months ago.

The on­line busi­ness, which de­liv­ers roll-up foam mat­tresses to cus­tomers in a box, launched it­self on Lon­don’s ju­nior mar­ket in a £140m list­ing as part of its ef­forts to raise £32m cash to fund its ex­pan­sion.

How­ever, the £2.1m of costs as­so­ci­ated with the flota­tion has al­ready eaten into Eve’s bottom line.

Pre-tax losses widened from £3.2m to £9.1m for the six months to the end of June. Mean­while, losses be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion also grew by £3.7m to £6.9m.

Eve blamed the widen­ing losses on the “rapid in­vest­ment in the busi­ness in ex­ist­ing and new ter­ri­to­ries”.

Mean­while, sales at the two-year-old com­pany soared from £5.1m a year ago to £11.5m dur­ing the last six months, helped by its ex­pan­sion in the UK, Ger­many and France.

Jas Bag­niewski, founder and chief ex­ec­u­tive, said: “We are a young com­pany with much to prove in the £26bn Euro­pean sleep mar­ket.”

“While the broader fur­ni­ture mar­ket in­clud­ing mat­tresses has been slow to tran­si­tion to on­line pur­chase, the pace of change is now start­ing to ac­cel­er­ate.”

Eve claims that it be­longs in the wider £26bn Euro­pean “sleep” mar­ket, which counts its sales of pil­lows, sheets and du­vet. Ear­lier this month, Eve, which has crit­i­cised tra­di­tional mat­tress re­tail­ers as “ar­chaic”, signed a part­ner­ship with Ger­man de­part­ment store Karstadt to sell prod­ucts in their 79 shops.

The on­line mat­tress re­tailer also has an agree­ment with Next’s Home stores, which the com­pany said will build its brand aware­ness.

Eve of­fers cus­tomers a 100-day-free trial but the bur­den of this and its heavy mar­ket­ing ex­penses means that the cost of at­tract­ing a new cus­tomer is £210. The com­pany said that it will also be launch­ing a new tele­vi­sion cam­paign this au­tumn.

The num­ber of mat­tresses re­turned, which Eve then ei­ther puts in tem­po­rary stor­age, de­stroys or cleans, has fallen from 18pc to 13pc, the com­pany said, de­spite re­ports of savvy stu­dents us­ing the mat­tresses for a term be­fore send­ing them back for free.

Eve shares, which listed at 101p in May, are now trad­ing at around 20pc lower at 81p.

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