New year boost for Eve

Eve Sleep saw seen sales jump by 16% in January and February after cutting its losses by 83% last year.

The bed brand says sales in 2020 rose by 6% to £25.2m, with the foam shortage limiting supply in the fourth quarter. Pre-tax losses fell from £12.1m to £2m.

‘In what has been one of the most difficult and unpredictable years for business, eve has exited 2020 in far better shape than it entered the year, through a combination of favourable external factors and sound execution of the strategy. The accelerated transition to online ordering and the strength of the homewares market brought about by the pandemic has provided tailwinds for the business. Whilst the sector remains highly competitive, there has been an improvement in the landscape, with the retrenchment of some online mattress companies, as well as reduced store-based competition, from both temporary and permanent shop closures,’ says Paul Pindar, Eve Sleep chairman.

‘The rebuild strategy is largely complete and eve now has a more resilient and efficient technology, logistics and operational platform for future growth. The product ranges have been expanded, alongside a broadening of distribution in both the UK and France, which has had the added benefit of further raising brand awareness. Underpinning the whole business is the quality of the mattresses themselves, which have been widely recognised as best in class. Consumer champion Which? in November 2020 rated Eve’s original and its premium hybrid the two best mattresses in the UK. The Premium Hybrid has also been awarded ‘Meilleur Choix’ (best choice) by the French equivalent of Which? – Que Choisir. 

‘Eve has continued to build on its differentiated strategy of focusing on the broader sleep wellness category as compared to more mattress focused peers where competition is largely price driven. Existing product categories have been deepened with further products, as well as eve’s move into new categories. eve’s first foray into gifting with Boots for a ‘well slept’ range of sleep gifts for the Christmas period sold out and the new partnership with the French homewares retailer Olivier Desforges goes from strength to strength. In tandem with new partnerships, Eve has exited those which were not economically viable, including Amazon UK, in order to stay focused on profitable sales growth.  

‘The company continued its ongoing investment in broadcast TV and supported its existing ‘wake up dancing’ campaign with an additional new campaign designed to build long term brand presence for Eve as a sleep wellness brand. This longer-term investment is a sign of increasing confidence in the business and its ongoing growth potential. The new ‘switch off with eve sleep’ campaign launched in November 2020 and runs every Sunday night across the Channel 4 estate, digital and mobile advertising through until spring 2021. The analytics on the campaign performance so far have been very positive, with payback above projected expectations.

‘Over the last two years the entire operations and processes of the business have been carefully analysed and restructuring plans put in place. The consumer websites have been re-platformed to Shopify, which, in addition to providing an improved customer experience and a more stable platform, reduces ongoing maintenance costs and is easily replicable across markets. As part of wider Brexit preparations to minimise any trade frictions and stay cost competitive, mattress manufacturing has been largely localised in the UK for the UK and Irish markets and Belgium for sales to the French market. Distribution capability for the UK&I, in terms of both warehousing and carriers has also been upgraded, resulting in an improved customer experience and a reduction in logistics cost through the consolidation of all items in an order into a single delivery.

‘Trading for January and February has continued to be strong, benefitting from the ongoing weekly TV campaign in the UK, the latest Which? ratings and the wider behavioural shift to online purchasing. Revenue growth for the first two months of the year of 16% represents an improvement from the last quarter of 2020 and has been boosted by an easing of supply constraints and improved stock management, which had previously held back the rate of growth in late 2020. Whilst we are still experiencing some challenges in componentry supply and inflationary pressures, we expect these issues to further ease in the coming months.

‘In the year ahead we will continue to expand and deepen our product offering. These wider categories including gifting and CBD are initially trialled through a license model, which limits both the initial risk but also the financial upside.

‘We will continue to invest steadily in the UK, with efficient marketing now driving consistent growth and a positive marketing contribution. We anticipate a slowing in our rate of UK progress from around May as a result of tougher comparatives and a likely shift in consumer spending to out of home as the country exits lockdown measures. However, we firmly believe that the recent shift to e-commerce will not reverse, and the underlying trend of sleep wellness, on which the eve brand is built, is a fundamental societal force that will continue in the long term.

‘We plan to increase investment in France through 2021 and build on the higher profile that our highly successful retail partnership with Olivier Desforges has provided. This will accelerate our growth in the country and provide a more balanced and sustainable growth profile to the wider business. Unlike the UK, France has not experienced such an accelerated shift to e-commerce over the past year, having maintained “open high streets” through most of the pandemic. We expect good growth from France in 2021 and beyond through a combination of the continued structural shift to online, combined with investment in our own established and award winning proposition.’

Eve

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