Eve Sleep plc: Trading update, director change, new partnership agreement (700431)

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 Eve Sleep plc (EVE) 
Eve Sleep plc: Trading update, director change, new partnership agreement 
 
02-Jul-2018 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
      eve Sleep plc ("eve" or the "Company") 
 
      Trading update, director change, new partnership agreement 
 
    eve, the direct to consumer European sleep brand, today issues a trading 
  update for the six months ended 30 June and announces that Jas Bagniewski, 
Chief Executive Officer, will be leaving the business with immediate effect. 
 
            Trading 
 
     While trading in the period has continued to far outperform the broader 
            market for big ticket consumer items, sales have fallen short of 
 expectations. Group sales for the six months are up by approximately 61% to 
             GBP18.6m, with the UK&I up 62% and international sales up 60%. 
 
       Trading patterns in the first six months of the year have experienced 
     greater volatility than originally expected, which in part reflects the 
 challenging backdrop for consumer spending. They also reflect the fact that 
 key growth initiatives have been launched at the latter end of the half and 
         as such are yet to generate a meaningful financial contribution. In 
 addition, management has made some strategic missteps, underestimating what 
    is required to develop a meaningful footprint across Continental Europe, 
      while losing focus on creating an aspirational sleep brand in its core 
            markets. 
 
In response to the first half trading performance and the challenging retail 
  environment, the Company has decided to refocus its strategy, from scaling 
    across multiple new countries to prioritising greater penetration in its 
     core growth markets. This will enable eve to focus on its key strengths 
around customer experience, product differentiation and brand. An evaluation 
of each of our existing European markets is underway to determine those that 
          are core. We will report the conclusions at our interim results in 
            September. 
 
 Given the current change in the business and the volatile trading patterns, 
     as well as the recent and upcoming growth initiatives, the Company will 
   provide more meaningful guidance for the full year outturn at its Interim 
results in September. However, notwithstanding the initiatives in place, the 
  revenue shortfall in the first half is not expected to be recovered in the 
   traditionally stronger second half given that the pull back from non-core 
markets will also act as a drag on second half revenue growth. The impact of 
lower growth for the year will delay UK profitability from Q4 2018, although 
       the full impact on earnings will be partially offset by targeted cost 
            savings. 
 
            Departure of CEO 
 
It has been agreed by mutual consent that Jas Bagniewski will step down from 
           the Board and the Company. The search for a new CEO will commence 
immediately, with both internal and external candidates being considered. As 
     an interim measure Abid Ismail will assume the responsibility of acting 
        Chief Executive Officer in addition to his duties as Chief Financial 
            Officer. 
 
            Nationwide partnership with Dreams 
 
   Today eve announces a major new partnership with Dreams, the UK's leading 
specialist bed retailer. The partnership, which is a first for Dreams with a 
   mattress in a box brand, will see the eve mattress sold nationwide in 193 
     Dreams stores and through its website. The rollout across the estate is 
expected to take just two weeks and commences today. It is expected that the 
      partnership will expand to include sales of ancillary products such as 
            pillows, toppers and linens etc. 
 
The deal increases eve's retail presence across its three largest markets to 
 331 stores, building on the Company's existing partnerships with Next Home, 
     Fenwick and Debenhams in the UK, Karstadt in Germany and BUT in France. 
 
The retail presence complements eve's focus on direct to consumer, providing 
         a physical touchpoint for those that prefer to purchase through the 
 traditional format, while avoiding the costs of an expensive retail estate. 
   A secondary benefit is that the physical presence also boosts eve's brand 
   awareness, which continues to grow. Latest data from independent research 
   agency Populus Omnibus shows that UK unprompted brand awareness has risen 
         from 6.3% at the end of March 2018 to 7.6% at 30 June 2018, further 
     cementing eve's position as the UK's most well-known direct to consumer 
           mattress brand. In London awareness increased from 7.3% to 11.4%. 
 
            Paul Pindar, Chairman of eve Sleep commented: 
 
"We have fallen short of our own and the market's high expectations and as a 
 result have taken the tough decision to make management change. Jas has, as 
 one of the founders, been a driving force for this business and has much to 
      be proud of. He leaves with the Board's best wishes for the future. In 
       tandem with the search for a new CEO we will with immediate effect be 
    refocusing all of our efforts on strengthening the eve brand in our core 
            markets. 
 
          While we do not anticipate a near term improvement in the external 
  environment, we have a healthy net cash position, our trading continues to 
 far outstrip that of the market and should be underpinned by Company growth 
  initiatives including the Dreams partnership that we expect to benefit the 
      traditionally stronger second half. We remain convinced that the sleep 
  market will continue to transition online, that the opportunity to build a 
new brand of size and strength is significant and that eve is well placed to 
            achieve this." 
 
            Enquiries: 
 
                          eve Sleep plc  via Instinctif Partners 
 
     Abid Ismail, Interim CEO and Chief 
                      Financial Officer 
 
                          Peel Hunt LLP       [phone] 
 
                            Dan Webster 
 
                          George Sellar 
 
                              Max Irwin 
 
                    Instinctif Partners       [phone] 
 
                              Mark Reed 
 
                        Guy Scarborough 
 
            About eve Sleep 
 
eve is an e-commerce focused, direct to consumer European sleep brand, which 
designs and sells eve branded mattresses and other sleep products, including 
            pillows, bedding and duvets. 
 
      The Company principally focuses on the design, branding, marketing and 
    selling of its products, with other aspects of its operations, including 
 manufacturing and fulfillment, being outsourced. This model has enabled the 
        Company to scale quickly internationally without the requirement for 
            significant capital investment. 
 
     The Company's strategy is to continue to penetrate existing territories 
  further, expand into new markets, extend its product range and develop its 
retail partnerships. Whilst the Company has grown quickly since incorporate, 
 its current market share of the fragmented European sleep market (estimated 
    to be worth GBP26bn) is only an estimated 0.1 per cent which the Directors 
           believe provides a significant opportunity for further expansion. 
 
        In May 2017 the Company listed on the AIM market, raising GBP35m gross 
  proceeds to accelerate its growth strategy. The shares floated at 101p per 
             share, valuing the business, post new money at c. GBP140m. 
 
       The information contained within this announcement constitutes inside 
       information as stipulated under the Market Abuse Regulations (EU) No. 
            596/2014. 
 
ISIN:           GB00BYWMFT51 
Category Code:  TST 
TIDM:           EVE 
LEI Code:       2138007BAC29AUXWQE6 
OAM Categories: 2.2. Inside information 
                3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   5701 
EQS News ID:    700431 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

July 02, 2018 02:01 ET (06:01 GMT)