(Sharecast News) - Mattress retailer Eve Sleep has called in administrators after sale talks proved unsuccessful.
The company announced in June that it was putting itself up for sale after suffering losses of £56m. However, it said on Monday that although a number of indicative offers were received, discussions over a potential sale or regarding an equity raise have not been successful.
"Regrettably therefore, the board has concluded that it is required to take the necessary steps to preserve value for creditors," it said. As a result, the board has decided to appoint Matthew Ingram and James Saunders, both of Kroll Advisory, as joint administrators.
It is expected that the administrators will be appointed by the court during the course of the day.
"The likely outcome to creditors of the company is currently unknown and it is not expected that the appointment of the joint administrators will enable there to be any return to the shareholders of Eve," it said.
Chief executive Cheryl Calverley said: "It is heart-breaking to have to acknowledge that the best way to preserve value for creditors, those partners and suppliers that have helped us on this journey, is to now terminate the formal sale process and appoint administrators. Having seen the year start so brightly, with the efforts of the team over the past three years in rebuilding eve into a business fit for profitable growth coming to fruition, the frustration at the unprecedented downturn in the market over February and March was felt all the more keenly.
"Despite monumental efforts to restructure the business and reshape the cost base, the scale of eve was simply insufficient to withstand the economic tsunami that has gathered momentum over the past six months, and allow it to continue as an independent business."
Russ Mould, investment director at AJ Bell, said: "It's all over for investors in Eve Sleep after the mattress seller prepares to go into administration. The business will keep trading while the administrator looks for a buyer, yet shareholders will have almost certainly lost everything. Trading in the stock has been suspended, and typically in these situations, shareholders won't get anything back even if a buyer is found.
"Eve Sleep has been more of a prolonged nightmare for investors rather than a stock that is tucked away and slowly works its magic. It has gone from 127p per share in 2018 to 0.54p in just over four years. Management couldn't generate a profit and the company was haemorrhaging cash.
"It goes back to the basics of business - you need a good idea, good execution and enough people to want to buy the product so you receive more money than you spend. Sadly, Eve Sleep didn't have all the right elements."
