D2C sleep wellness brand eve Sleep has issued a dispiriting set of H1 results (to 30th June 2022), as its bid to raise the funds required for the company's survival continues to stall.
UK revenues were down -18% YoY, with B2C UK revenue down -14% YoY.
Product ranges were consolidated to focus on the most profitable lines, while eve's new partnership with DFS, which launched in March, has expanded both its range of products available on the DFS and Dwell websites and increased the number of store outlets to 10.
eve completed cost-saving measures to cut overheads on an annualised basis by some £2.5m, while the brand saw a positive marketing contribution in July and August, which its managers expect to remain positive across H2.
As of 31st August, the company’s cash balance was £1m, with a drawn working capital facility of £0.7m – yet ongoing challenging market conditions (B2C sales orders for July and August were down -14% YoY in the UK&I) paint a bleak short-term outlook, despite a "very strong" start to the year.
eve commenced a formal sales process on 6th June 2022 to explore the strategic and financing options available, including a possible sale. To date there have been no firm offers. Significant costs savings have been made to conserve cash, but, "notwithstanding these savings, eve will require further funding in October 2022, based on current management forecasts. If further funding cannot be raised, or a firm offer for the company is not received before the company’s cash reserves are fully depleted, the board will take the appropriate steps to preserve value for creditors".
CEO Cheryl Calverley comments: “We are doing everything possible to manage the business through these incredibly difficult times, whilst speaking with potential investors and strategic partners to secure fresh investment aiming to put eve on a more secure and sustainable footing. The business has been streamlined dramatically, with cash preservation our absolute focus.
"eve has a strong brand, an award-winning product range, a differentiated position in sleep wellness and a restructured business with a greatly reduced breakeven point, all backed up by a fantastically talented team. Truly unprecedentedly appalling market conditions have stopped 2022 being the transformative year that it was intended to be despite a very bright start, and our focus is now on navigating the current storm through to calmer waters with a much more efficient business.”