Revenues at mattress company Eve have plunged 18% this year amid what the company called “truly unprecedentedly appalling market conditions”, resulting in slashed executive salaries and a rush to find new investment.
The company said it had been planning for significant growth in 2022 and had structured the business accordingly.
But from February, the impact of the war in Ukraine, consumer price inflation, the fear of rising fuel prices and four increases in UK base rates weakened consumer confidence and led to reduced spending on household furniture.
Its revenue in the six months to the end of June fell 16% to £11.6 million compared to the same period last year, and its overall losses doubled to £4.6 million.
This meant that Eve was forced to consolidate its products to focus on its most profitable lines, and has cut its annual overheads by £2.5 million.
It also slashed salaries for its senior executives and restructured its staff.
Sales have continued to be sluggish over the summer, with direct sales to customers in the UK and Ireland 14% lower in July and August than in the same months last year, while in France, sales were down 16%.
In June, the company commenced a process to see if it could be sold, or whether there were other financing options available to it.
Eve said it had had “a number of indicative offers”, none of which had moved forward.
“Eve will require further funding in October 2022, based on current management forecasts,” the company said.
“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.”
Eve’s CEO Cheryl Calverley said “everything possible” was being done to keep the business afloat.
“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,” she added.