D2C sleep wellness brand eve Sleep has launched a review to explore the strategic and financing options available to it, including the possibility of a sale.
Having delivered a third consecutive year of growth in revenues and marketing contribution in its core UK and Ireland business in 2021, and cognisant of current trading conditions, eve says it now wishes to accelerate its push into the wider sleep wellness space: "In order to deliver our objective of creating the first digital sleep wellness retailer, the board considers that eve would benefit from additional investment."
eve says discussions around investment with a US-based investor – which developed into talk of an offer – have broken down, but that the brand is considering "all possible strategic and financing options", and has decided to undertake a review under the auspices of a “formal sale process” as defined in the Takeover Code (the Formal Sale Process, or FSP), detailed here.
In a concurrent trading update, eve says it continues to outperform a market. Over the five months to 29th May, and against challenging YoY comparatives, eve’s D2C sales orders in the UK and Ireland were down -15%, and down -3% in France.
Its retail partnership with DFS, which initially launched in March solely on the retailer's website, has been extended to cover some of the store estate and with an increased product range.
In May, eve launched its new CBD sub-brand, Well Slept, with its own website.
Its plan to enable selling into the Belgium market is on track to complete this month.
eve says trading is benefitting from the C4 sponsorship, which runs for 12 months from April 2022 on ‘late nights on 4’. As a result of this recent progress, sales orders for the D2C business for the last three weeks have grown +2% in the UK YoY, and +40% in France. At the Group level, eve has achieved YoY sales growth in each of the last three weeks.
However, based on the first five months of trading, and its expectation that the cost of living crisis is set to continue for some time, eve's board does not now expect to meet its previous revenue expectations for the current year, with additional promotional activity also having an impact on gross margins.
CEO Cheryl Calverley says: "eve has the opportunity to become the first digital sleep wellness retailer given our award-winning mattress ranges, strong brand and suite of wellness products, including our new CBD sub-brand Well Slept in the on-trend and rapidly growing global sleep economy.
"However, in order to fully achieve this long-term potential, particularly in the face of weakening consumer confidence, there is a need for additional investment. Recent inbound investor interest has led the board to conclude that the optimum way to build shareholder value and realise the opportunity in sleep wellness is to launch a strategic review to secure either a new owner or a major strategic investment partner.”