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