Eve sees management clear out after £20m loss
Online mattress in a box retailer Eve Sleep has seen a clear out of senior management after pre-tax losses increased to £20m and Dreams stopped selling the products.
Abid Ismail, Eve chief financial officer and Felix Lobkowicz, Eve chief operating officer are to leave while Kuba Wieczorek, Eve chief brand officer is to become a part-time consultant.
The company saw pre-tax losses increase by £1.3m to £20.3m in the year to 31 December 2018 while its cash fell from £26.9m to £6m.
It has raised £11.7m from shareholders alongside £900,000 worth of advertising from Channel4.
Sales rose 25% to £34.8m, as it cut back selling to the UK, Republic of Ireland and France in July. Sales in those markets rose 35% to £29.4m. Repeat sales in those markets rose from 11% to 14% and returns dropped from 10.5% to 9.3%.
The company said it expected 2019’s sales to grow by 25% – with the UK and Republic of Ireland having much higher growth than France – but with a substantial reduction on losses.
It said Dreams wanted to renegotiate terms and it believed there were ‘other more profitable opportunities to be pursued instead. The impact of this step on 2019 performance is not expected to be material due to the low levels of revenue and profitability that were expected to be delivered from the arrangement.’
James Sturrock, Eve ceo said his strategy would cut losses. ‘We have made some good early progress with our rebuild strategy and have secured the funds to execute on it. As part of our pathway to profitability plan we have taken decisive action on 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.When combined with the expected benefits of our rebuild strategy, we anticipate a significant reduction in losses in 2019.
‘The opportunity to create a sleep wellness brand remains undiminished and I am confident that Eve's rebuild strategy, centred around a differentiated brand positioning, expanded product range, lower friction customer experience, combined with increasing brand awareness will win out over peers. Our new approach focuses on sustainable growth and sets out a clear path to building a profitable business, which delivers for shareholders.’