Details of eve Sleep administration revealed; sale valued £600k

Sleep wellness brand eve Sleep was sold for sum of £600,000 after the company was placed into administration.

Matthew Ingram and James Saunders, both of Kroll Advisory Ltd, were appointed as joint administrators on 17 October 2022.

Detailed in newly filed documents on Companies House, eve Sleep, which was consistently loss-making since its inception in 2014, suffered from declining market conditions and consumer confidence, alongside rising inflation in input prices for consumers.

For the nine months to September 2022, eve posted a loss of £5.2m with sales of £17.1m. For 2021, sales stood at £26.6m, while losses resulted at £3.4m. Back in 2018, eve saw losses reach as high as £20.3m from sales of £34.8m.

Due to these measures, the company warned stakeholders of the impact on its cash reserves and launched a formal sale process on 6 June 2022. This subsequently failed with the business undertaking an accelerated marketing process for its business and assets.

This resulted in 249 parties being targeted, with 95 operating in the same sector. From this, 22 parties requested non-disclosure agreements, which materialised into three offers. Party A offered £250,000, which was then reduced to £25,000 following due diligence. Party B’s offer was a lower consideration and was not included as a comparison. The final offer was for £300,000 but was negotiated up to £600,000.

Upon appointment of administrators, the brand and assets were sold to Bluegroup IPCO Limited and Bensonsforbedsretail Limited, both owned by Alteri Investors, for a total consideration of £600,000 in a pre-pack deal. This included the eve Sleep brand and intellectual property, the website, and all creative, content and communication assets.

The breakdown of this figure included £494,999 for IP and promotional literature, £5,000 for computer equipment, £1 for business contracts, which were acquired by Bluegroup, and £100,000 for its databases, acquired by Bensons.

Administrators confirmed that the pre-pack deal did not include eve staff, understood to be around 21, which were made redundant upon appointment.

With regards to creditors, preferential claims totalled £432,600, which consisted of employee and HMRC claims of £35,000 and £397,000 respectively. Administrators said it expects that there will be sufficient funds available to enable a distribution.

As for unsecured creditors, a further £429,000 is owed to employees, while £1.9m is owed to trade creditors. A sum of £50,000 is owed relating to consumer deposit claims in respect of undelivered goods. However, other consumer claims on returns, refunds or warranty, under its 1-year trial and 10-year warranty on mattresses, could be received as the company cannot satisfy this.

Administrators said it is unable to estimate the potential level of claims of this nature at this time, while adding that there might be some funds to repay unsecured creditors but warned it is ‘difficult to predict the likelihood of a dividend at this stage’.

Following the acquisition, Bensons said it intends to retain eve Sleep as a standalone brand and re-launch

The move to acquire the eve Sleep brand will widen Bensons’ appeal and is a measure of its ambition as it continues to invest in its retail, manufacturing, digital and distribution operations.

“eve Sleep is a brand that we know resonates strongly with key customer groups and we’re looking forward to unlocking its full potential as it takes advantage of our scale and reach.” said Bensons for Beds chief executive officer Nick Collard.

“What’s more, bringing in eve Sleep alongside our own growing portfolio of high quality in-house brands will help us widen Bensons appeal to a broader set of customers,

“With the backing of our owner, Alteri Investors, this is another indication that we are delivering on our pledge to fulfil the promise of the Bensons for Beds brand itself – not just as a retailer of market leading proprietary brands, but with a distinctive and coherent set of owned brand sleep solutions for any customer, both digitally and through our stores.”

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