Eve Sleep has called off a potential merger with rival Simba Sleep as it said “now is not the right time” to make an acquisition.
Eve, which overhauled its management team in March, has decided to focus on its own business recovery instead of the talks, which it confirmed were underway last month.
“The board of Eve has 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,” the company said.
The direct-to-consumer mattress company will unfreeze its shares today now the talks have come to an end.
It also revealed that it has narrowed losses, which halved year on year in the first six months of 2019.
But it warned that trading has been more “challenging than previously anticipated” as it seeks to boost revenues.
It blamed the UK’s “uncertain economic outlook” and low consumer confidence, as well as steep competition, could push 2019 revenues down to between £25m and £27m.
James Sturrock, CEO of Eve, said the firm has slashed its admin costs and cut bloat from its marketing strategy.
“The opportunity to create a leading sleep wellness brand remains undiminished,” he added.
“I am confident that Eve’s rebuild strategy, centred around a differentiated brand positioning, expanded product range, lower friction customer experience, combined with increasing brand awareness sets out a clear path to building a profitable business, which delivers for shareholders.
“We will continue to examine ways of accelerating Eve’s rebuild strategy and the move to profitability, through organic and inorganic growth.”
The Woodford-backed company suffered a crash in shares after investors were offered stock at cheap prices during a £15m funding round last December.
Eve’s loss of value also hit Simba, which cut its valuation to just £20m.
Main image: James Sturrock, CEO of Eve Sleep (credit: Eve Sleep)