Made.com to cut staff as it mulls sale of the business
Beleaguered retailer Made.com said it will conduct a strategic review of its future options, including job cuts and possible sale of the business.
The online furniture and homewares firm came to market in January last year at a price of 200p per share, valuing the group at £775m. The shares have steadily slumped ever since and were trading at just 6p yesterday.
City PM reported last month that because of this share tumble, Made had called in PwC as financial advisors, with the view to discuss a share sale to raise around £50m.
The firm said in a statement this morning that it would start cutting costs by laying off staff within the next few weeks, although it is not entirely clear how many will be impacted by this cull.
“Made is not alone in being hit by problems in the supply chain and the cost of living squeeze but we are taking actions to ensure our continued success, supported by our strong brand, an excellent product range and a large and loyal customer base in multiple markets,” chief exec Nicola Thompson said.
The emergency cash raise measures come just a few months after the retailer issued a profit warning and slashed its sales and earnings outlook for this year, blaming soaring costs in its supply chains and low consumer confidence.
Bosses forecasted a core loss of £50m to £70m, versus previous expectations of a loss of £15m to £35m.
Weighing in on Made’s tricky time on the stock market, AJ Bell analyst Russ Mould said: “It floated at a time when people were sprucing up their homes having spent so much time indoors during the various lockdowns. Demand for new sofas was high and a lot of investors presumed growth would continue to be good.
But Made.com quickly became unstuck thanks to supply chain problems with customers waiting months for their sofas to be delivered, leading to cancellations and frustration. Then the cost-of-living crisis bit and big-ticket items like a new three-piece were put on the backburner, all contributing to a severe slump in Made.com’s share price and a slew of profit warnings.”
The options for the company are now to look at debt financing, bring in a strategic investor, merge with another business, or sell the whole company.
Shares plunged a further 30 per cent this morning.