Mattress specialist Eve Sleep has issued a profit warning as well as announcing the collapse of its proposed merger with Simba Sleep. The retailer also blamed “challenging” trading and an uncertain economic outlook to have impacted its results for 2019. As such the retailer has changed its outlook and revenues are likely to be “in the range of £25-£27 million”. The merger with Simba Sleep was unveiled in August however along with the issued profit warning Eve Sleep has confirmed that it will no longer be proceeding with the merger. The retailer said its board “decided that now is not the right time to pursue the potential merger and that it is more appropriate to focus on the Eve rebuild plan”.

CEO of Eve Sleep, James Sturrock, says this on the new outlook for 2019: “We have continued to make progress with our rebuild strategy and have taken action to reduce 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. As detailed above, we anticipate a significant reduction in losses in 2019.”

Eve Sleep posted an underlying EBITDA loss by 50% to £5.9 million in its half-year results covering the six months to June 2019. During the period the group’s underlying revenue decreased 8% to £12.9 million in the period.

“The latest profit news from Eve Sleep is perhaps unsurprising, as the group continues its rebuild strategy amid a year of falling sales. Caution was attributed to the challenging retail environment, which has seen a number of the UK’s leading box mattress brands, including prospective merge candidate Simba, turn a loss in the past year. The box mattress brand market is growing increasingly competitive as the sector matures, forcing groups to scramble to differentiate in their brand positioning. Eve’s focus now turns to building its niche in the growing ‘sleep expert’ trend; tapping into sleep’s role in the growing wellbeing market. However, the year ahead will be a difficult one, with challenging trading, economic uncertainty and heavy discounting likely to continue.”