Can't withstand the "cold winter"! A well-known European retailer goes bankrupt and liquidates

As the peak season approaches, some sellers are eagerly waiting for a surge in orders, but some sellers can no longer hold on before the peak season. After the former top seller on Amazon's US site went bankrupt and liquidated, and the well-known home furnishing brand Purple faced delisting and privatization, a European star seller followed closely and announced bankruptcy and liquidation recently.

It closed after nearly eight years of existence, with 2.7 million monthly visitors

Recently, Eve Sleep, a well-known European home furnishing e-commerce company , announced bankruptcy and liquidation due to continuous losses and falling stock prices. Its related brands, websites and assets were acquired by another bedding retailer, Bensons for Beds. As soon as the news came out, many sellers lamented: "Another one has gone bankrupt."

It is understood that Eve Sleep has been established for nearly eight years and is headquartered in London. Eve Sleep mainly sells DTC furniture products. Its star product, boxed mattresses, has sold tens of thousands of units a year and has received 2.7 million monthly visitors. This dark horse brand has attracted the attention of investors quickly because of its relatively short-lived sales capabilities.

Subsequently, the increase in capital also enabled the company to develop rapidly. In 2015 and 2016, Eve Sleep raised a total of 10 million pounds, which caused its valuation to rise rapidly. When it went public in 2017, its valuation exceeded 100 million pounds and it gained a large number of young fans.

Its performance in the past two years has been quite impressive. In 2021, the brand's annual revenue reached 26.6 million pounds, which was about 220 million yuan at the time. In February this year, its stock price once soared by more than 54%. However, its outstanding performance could not escape the dilemma of continued losses and market decline.

In fact, data shows that its market value dropped from a peak of 150 million pounds to 22 million pounds as early as 2019, and the stock price has fallen by nearly 90% so far. Its performance has also suffered losses for consecutive years. From 2016 to 2018, it lost more than 10 million pounds. However, although the brand has gradually lost its vitality, it still maintains a large customer acquisition ability.

It is reported that the acquirer Bensons for Beds is the largest bedding retailer in the UK. Under the pressure of the market, the acquisition of Bensons for Beds can be regarded as a counter-trend for itself. Eve Sleep will be an independent brand of the company.

As a well-known European e-commerce brand, the closure of Eve Sleep is unavoidable. However, in fact, many big sellers in the European and American markets have already left this year.

Many well-known sellers in the European and American e-commerce markets have left

As early as August this year , the news of the bankruptcy and layoffs of Packable, which had repeatedly topped the list of Amazon US sellers, caused heated discussions among sellers. In response, one seller said: "Not only small companies, but also the largest sellers in the United States can't hold on!" The main reason for Packable's layoffs and liquidation was that it failed to obtain new internal and external financing, which made it difficult to make profits. In September, Packable officially filed for bankruptcy protection in the Delaware Bankruptcy Court of the United States.

Packable was once the top seller on Amazon’s US site. Among the many e-commerce platforms that it sells through, 80% of its sales revenue comes from Amazon. Data shows that the company’s real-time supply capabilities are very strong, with an average daily order volume of 30,000 and more than 30,000 SKUs on sale. However, even such a large brand is under financial pressure, and the “failure” of financing has accelerated the company’s exit.

Also surprising to industry insiders are the US DTC home furnishing brand Purple and the UK's well-known home furnishing e-commerce platform Made.com. Both companies are also facing danger due to performance losses. In 2021, Purple's revenue reached US$726 million, but due to two consecutive quarters of large losses, it is facing delisting and privatization.

Another company, Made.com, which was founded 12 years ago, has also been trying to find an acquirer recently. As a veteran e-commerce platform, its annual sales once reached 300 million pounds, and its market value was nearly 780 million pounds when it went public last year. Five months ago, the company announced the acquisition of Trouva, an online market for fashion, lifestyle and home furnishings, but suddenly became the acquired party.

Combining the situations of several major sellers, they all had impressive performance in the European and American markets, but they all encountered operational difficulties due to lack of substantial product breakthroughs or funding issues under market competition and the general environment. It can be seen that local major sellers in the European and American markets are also facing dual pressures from themselves and the external environment.

As inflation in Europe and the United States continues, more consumers tend to shop online

Since the beginning of this year, due to multiple factors, inflation in Europe and the United States has continued. The price increase caused by inflation has affected the lives of many people. Some foreign media reported that the Federal Reserve may be considering reducing the rate hike in December, and the rate hike may be reduced from the previously predicted 75 basis points to 50 basis points. In the eurozone, the European Central Bank also announced a 75 basis point rate hike at the beginning of this month.

Under high inflation, many people's willingness to consume has decreased or consumption dynamics have changed, which has also had a certain impact on the order volume of domestic and foreign sellers. In addition, it is worth noting that the overall trade volume in the European market is not optimistic. Data shows that the total volume of merchandise trade in the eurozone fell by 6% in the third quarter of this year , of which the UK fell by 5%.

There have been several strikes in the UK recently. It is reported that due to high inflation, workers' demands for higher wages have not been met. Workers in Liverpool will go on strike for two weeks starting on the 24th of this month . Royal Mail employees will also go on strike, which may affect the normal transportation of goods. This has also made some sellers worry whether this year's peak season will be as smooth as in previous years.

At the same time, consumers' willingness to consume has also become a point of concern for sellers.

Recently, Intuit QuickBooks released the results of a holiday shopping survey, which surveyed 9,700 adults and 3,000 small businesses in the United States, Canada and the United Kingdom, showing that brands and retailers may experience a difficult holiday shopping season due to low consumer confidence and increased demand for experience.

According to the survey, European and American consumers plan to buy fewer gifts this year than in previous years due to rising costs. Among them, 66% of American respondents, 67% of Canadian respondents and 73% of British respondents said that they will buy fewer gifts for family and friends this Christmas. If the economy continues to deteriorate, 80% of consumers said they will cut spending.

However, fortunately for online sellers, the relatively low online prices have prompted more consumers to turn their attention to online shopping. The survey also showed that more than 70% of the consumers surveyed are accustomed to shopping online. The prices of online products and incentives are very attractive to buyers. The formation and strengthening of online shopping consumption habits is a positive signal for online sellers.

Recently, major e-commerce platforms will also start pre-season promotions. Amazon's beauty product promotions and Walmart's resumption of Black Friday sales have made the peak season atmosphere more intense. Many sellers have reported that the sales of some products have begun to improve, and plans for overtime orders during the peak season have been arranged.

European home furnishing brands

Bankruptcy liquidation