Made.com is seeking a buyer or emergency investment as the embattled online furniture retailer plans to shed a third of staff to stretch its dwindling cash reserves.
The company, which in July warned of job cuts as increasingly cash-strapped consumers stopped spending on “big-ticket” items, has withdrawn full-year guidance as sales plummet.
Made.com, which had considered turning to the markets to raise more funds, now says the dire conditions are “not supportive at the current time of raising sufficient equity from public market investors”.
The retailer, which made its stock market debut last year, is undertaking a strategic review looking at options including debt financing, finding a strategic investor, a sale of the company or a merger with another business.
“While the group has had a number of strategic discussions with interested parties, the group is not in receipt of any approaches, nor in discussions with any potential offeror, at the time of this announcement,” said the company, which has appointed PwC to handle the strategic review and sale process.
Shares in Made.com, which has issued three profit warnings this year, have slumped by 98% to only 4p since it floated on the stock market in June 2021. Its market value has plunged from £775m to £15m.
Since the start of the year the London-based company has implemented measures to attempt to preserve its finances, including limiting forward purchasing of inventory, implementing a hiring freeze, halting marketing spend, and reducing capital expenditure.
“In order to extend the group’s cash runway further, the board has concluded that costs must be reduced further and a process has commenced to implement additional cost reductions, including a strategic headcount review, within the next few weeks,” the company said.
The Financial Times reported that the job cuts could amount to 35% of Made.com’s workforce, who will leave by the end of next month.
The company is also consolidating its supply chain in Europe and Vietnam, closing its operations in China, and reducing its warehouse capacity because of lower levels of consumer demand. Customer service will be outsourced to a third party.