Mattress retailers head for period of consolidation, GlobalData

Eve Sleep and Simba have entered initial talks about a merger. And further consolidation will be the name of the game in the mattress-in-a-box space as brands struggle to differentiate themselves, according to GlobalData.

Eve Sleep has seen its market value rapidly deteriorate, whilst Simba slashed its valuation to secure extra funding in February 2019. There is significant overlap between the pair, 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,” says Matt Walton, Senior Retail Analyst at GlobalData.

“With both recently requiring fresh investment to cover their losses and the level of competition building as the multi-channel bed specialists develop and promote their offer, merging was the only option to ensure their long term survival.”

He adds: “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.”

GlobalData also expects international brands, such as Bruno and Casper, to consider retracting back to their domestic markets in the face of stiffer competition in the UK.