Mattress in a box specialists Eve Sleep and Simba are in early-stage merger talks as the loss-making businesses seek to guard against a challenging landscape.

Simba is said to be driving talks over a deal, which would be designed to help the retailer boost its buying power and cut costs.

Senior executives from the two etailers have already held talks, with further discussions planned this week.

In a statement to the stock exchange this morning, Eve said that any deal, first reported by The Sunday Times, would result in it acquiring Simba. Eve warned that “there can be no certainty that the potential transaction will proceed”.  

However, Eve has temporarily suspended trading on AIM under market rules. The retailer said it would update its shareholders “in due course”. 

Simba was founded in 2015 by James Cox, Steve Reid and Andrew McClements. But after a turbulent period of trading, it slashed its valuation in February from £200m to £20m in order to secure fresh funding.

The pureplay raked in sales of £28.4m in the year to September 2017, its latest full-year accounts.

Eve Sleep has faced similar challenges. After floating for £140m in May 2017, its share price has tumbled from a December 2017 peak of 130.5p to just 4.9p when markets closed on Friday. 

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