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Eve Sleep CEO departs after company 'falls short of expectations'

AIM-listed mattress and pillow retailer Eve Sleep has parted company with CEO Jas Bagniewski after it admitted strategic mistakes and revealed sales have fallen short of expectations.

In a multi-faceted market announcement on Monday morning, the digital-first retailer revealed it is embarking on a new strategy that will see it rein in international expansion plans and refocus on core markets. It also unveiled a partnership that will see the ‘mattress in a box brand’ sold in UK retailer Dreams’ 193 stores.

Group sales for the six months are up by approximately 61% to £18.6 million, with the UK & Ireland arm up 62% and international sales rising by 60%. However, Eve said trading patterns have been more volatile than expected.

Eve noted that its key growth initiatives have yet to generate a meaningful financial contribution, and it acknowledged management has made “some strategic missteps, underestimating what is required to develop a meaningful footprint across continental Europe", which has led the organisation to lose focus in core markets.

As well as letting Bagniewski go “by mutual consent”, the business will undertake an evaluation of each of its existing European markets and will report on its conclusions at the company’s interim results in September, when it will also be able to provide “a more meaningful guidance for the full year”.

It did state, however, that the revenue shortfall in the first half is not expected to be recovered in the traditionally stronger second half due to its pull-back in certain markets. The impact of lower growth for the year will delay UK profitability, it added.

The search for a new CEO has commenced with immediate effect, and both internal and external candidates are being considered. Abid Ismail will assume the responsibility of acting CEO in the interim period, in addition to his duties as CFO.

Eve’s partnership with Dreams extends its physical retail presence across its three largest markets to 331 stores, which includes selling in Next Home, Fenwick and Debenhams in the UK, Karstadt in Germany, and BUT in France.

Paul Pindar, chairman of Eve Sleep, commented: "We have fallen short of our own and the market's high expectations and as a result have taken the tough decision to make management change.

“Jas has, as one of the founders, been a driving force for this business and has much to be proud of. He leaves with the board's best wishes for the future.”

He added: “While we do not anticipate a near term improvement in the external environment, we have a healthy net cash position, our trading continues to far outstrip that of the market and should be underpinned by company growth initiatives including the Dreams partnership that we expect to benefit the traditionally stronger second half."