Following today’s news (Monday 12 August) that Eve Sleep and Simba have entered initial talks about a merger.
Matt Walton, Senior Retail Analyst at GlobalData, a leading data and analytics company, offers his view on what this means for the online mattress market:
“The news that Eve Sleep and Simba have entered preliminary talks about merging is unsurprising, with the former seeing its market value rapidly deteriorate and Simba having to slash its valuation to secure extra funding in February 2019 as they struggle to stand out in a crowded market. There is significant overlap between both Eve Sleep and Simba, with similar features for their hybrid mattresses, trial periods, warranties and delivery. Indeed, the main differences between the two are the physical retailers they partner with and a wider range and price architecture at Eve Sleep.
“Communicating their brand image to shoppers, as well as the infrequent nature of buying a mattress requiring the consistent recruitment of new customers, has forced these brands to invest heavily in marketing, with Eve Sleep’s advertising costs equating to 46.6% of its UK and Irish revenue in 2018. With both recently requiring fresh investment to cover their losses and the level of competition building as the multichannel bed specialists develop and promote their offer, merging was the only option to ensure their long term survival.
“The potential merger of the Eve Sleep and Simba brands is likely to be the first domino to fall in the consolidation of the mattress-in-a-box market, as the high marketing costs forces many of the smaller mattress brands to merge or fold. We also expect the international brands, such as Bruno and Casper, to consider retracting back to their domestic markets in the face of this stiffer competition in the UK.”