Global sleep technology brand Sleep.8 owed creditors almost £20m ahead of entering administration, with inter-company claims accounting for the majority of debt.
Frank Wessely and Richard Easterby, both of Quantuma Advisory Limited, were appointed as joint administrators of Sleep 8 Intrinsic Limited, trading as Sleep8, on 4 August 2025.
In the build up to its administration, the business, which employed 40 staff and was based at the Lakeside Retail Park in Thurrock, started to experience financial issues largely due to rising costs and ongoing operational challenges.
The UK market was not as successful as anticipated and indeed the company made losses of £130,134 for the period ending 31 December 2022 as per its last filed accounts and £10.6m as per the management accounts as of 31 May 2025.
Also highlighted in draft management accounts for the period to 31 July 2025, detailed turnover of £2.1m, reducing from £3.4m (for the period ended 31 December 2024), with pre-tax losses at £2.4m.
The financial burden of funding accumulating losses by the Parent Company became less viable and in order to mitigate costs, in Q1 2025, the company closed two of its retail outlets.
As the retail climate became increasingly cost-prohibitive the Parent Company provided financial support by injecting further funds to meet liabilities. On Administration this inter-company liability stood at £11.7m.
At the start of Q3 2025, the Parent Company decided it was no longer willing to fund the accumulating losses and began to wind down UK operations, including the closure and exit of its six stores.
“From a strategic perspective and taking the trading challenges into account, the intention of the Parent Company was to exit the UK market and instead invest into opening new stores in Spain and scaling its B2B partnerships across Europe,” the administrators report said.
Upon entering administration, it was concluded that to achieve the best financial outcome, a short period of trading would be undertaken, to complete the existing order book for which deposits had already been paid and non-order, free stock at the Thurrock site be sold in a controlled winddown to maximise realisations.
All trading sites with the exception of Thurrock closed upon appointment. All 20 non-Thurrock staff were made redundant with the remaining 20 staff based at Thurrock being retained for the one-month trade out period.
After successfully completing in-train customer orders and concluding the sale of all the company’s commercially valuable stock, on 29 August 2025 trading ceased and subsequently the Thurrock premises was vacated.
With regards to creditors, preferential employee claims of £45,000 are expected to be repaid from realised assets valuing £301,000 – this was largely from retail and display stock sold at a value of £205,000. The HMRC is also owed £107,000 and is expected to be repaid.
As for unsecured creditors, claims totalled £17.1m, with £11.7m owed as an inter-company debt to Sleep 8 Holding LDA as highlighted above. A sum of £128,000 is owed to employees, while seven consumer creditors are owed a combined figure of £27,800. Other inter-company debts included £1.7m to Sleep 8 UK Limited and £1.3m to £AFT Advance Furniture Techno. It is expected that creditors will suffer a shortfall of £16.9m.
At the time of its UK exit, Sleep8 said: “This decision reflects our responsibility to invest wisely and focus on the markets where growth is achievable. We are grateful to every customer who chose to shop with us in the UK, and we want to thank our dedicated team members for the care and commitment they brought to every interaction. Their work has laid a foundation we’re proud of.”
