Made.com sells off after concluding online furniture retailer is unable to raise new capital to sustain business hit by collapse of consumer confidence and supply chain disruptions in the UK I sent it to
Made.com, which went public last year, warned about its profits in July and last month said it needed to raise more cash. The company said on Friday it would consider various options, including a sale or the possibility of debt financing.
“At this point in time, where we have raised enough shares from public market investors, the general picture is not supportive,” Maid said in a statement.
It also said it would withdraw its full-year financial guidance because “unexpected events in the UK over the past two weeks have exacerbated a deterioration in trade”, referring to the death of Queen Elizabeth II.
The stock, which has tumbled since last June’s 200p IPO price, fell another 32% in early trading on Friday. The Group’s market capitalization is now just £15m compared to an estimated need of at least £50m in new funding.
“While the group has had numerous strategic discussions with stakeholders, at the time of this announcement, the group has not been approached or engaged in discussions with potential proponents,” said Made. says Mr.
Although Made’s finances are tight and business is difficult, since its launch in 2010, it has built up a customer base of over one million people, and its distinctive design is supported by young, wealthy customers.
The list of companies that could potentially be interested in its brand and customer base is long. Sportswear and department store group Frasers acquired his Sofa.com from a lender in 2019. John Lewis is also seen as a possible acquisition. Former Finance Director Patrick Lewis is now Made’s Chief Financial Officer.
The private equity operator previously owned UK market leader DFS in sofas, bed retailer Dreams and in 2019 Alteri acquired Bensons for Beds from South African conglomerate Steinhoff.
Several bankers cited Dunelm, a retailer of home goods such as curtains and bedding, as another potential acquirer eager to branch out into furniture. But Dunelm sees itself as a furniture price buster, and it sits in an odd position with Made’s more premium offerings.
Almost half of Made’s revenue comes from outside the UK. This is unusual in a fragmented market with few pan-European operators and could appeal to companies such as Frankfurt-listed Home24 and Westwing. But their stock prices are also plummeting.
Maisons du Monde, a French furniture retailer with a similar design-driven ethos, could also be of interest. A person familiar with the company said prices needed to bottom out given Made’s financial situation, but it was strategically sound.
The group said lower consumer spending forced it to cut prices to shift inventory. At the same time, transport costs that ballooned from his £8.2m in 2020 to his £45.3m last year could not be passed on to consumers.
The group also announced significant cost cuts, first reported by the Financial Times on Thursday.
“In the coming weeks, we have initiated a process to implement additional cost reductions, including a strategic personnel review, but we are determined to ensure that we have the appropriate skills and resources to effectively implement the strategic review process. ,” said Made.