Direct-to-consumer sleep wellness brand eve Sleep has reported a decline in half year sales as losses widen.

According to its latest trading update for the six months ended 30 June 2022, total sales fell 16% to £11.6m from £13.9m against the same period last year.

Gross profit declined 33% to £5.1m from £7.6m, while pre-tax losses widened from £2.3m to a loss of £4.6m, a movement of -£2.3m.

eve Sleep said that UK sales are down 18%, while its B2C revenues outperformed the wider business, but were still down 14%. Revenues in France fell 8% year-on-year.

During the period, eve decided to consolidate its product ranges to focus on the ‘most profitable lines’, and secured a new partnership with sofa retailer DFS, which has expanded both its range of products available on the DFS and Dwell websites and increased the number of stores to 10.

As for current trading, eve said sales orders for July and August are down 14% in the UK and has undergone a savings exercise to minimise costs with directors reducing salaries. Costs are expected to be reduced in overheads by £2.5m, which will result in lower losses. This also includes the reduction in headcount from 50 to 33 through a combination of ‘natural attrition and some restructuring’.

Furthermore, the production of most of the foam mattresses was moved to a new supplier to achieve significant cost savings from H2. The hybrid mattresses, which comprise foam and springs, were not moved and working with the existing manufacturer has enabled some cost savings, eve said, adding that the benefit of these actions will also be seen from H2.

The company also outlined an update on its sale process, which was launched on 6 June 2022 to explore the strategic and financing options available, including the possibility of a sale of the company.

To date, a number of indicative offers have been received but have not yet translated into firm offers following ‘discussions and the facilitation of due diligence’.

However, despite the savings made as noted earlier, eve will require further funding in October 2022. 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’.

Cheryl Calverley, CEO of eve Sleep, commented: “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.”