Made.com is looking for an emergency buyer or investment as the struggling online furniture retailer plans to shed a third of its staff to stretch its dwindling cash reserves.
The company, which in July warned of job cuts as increasingly cash-strapped consumers stop spending on ‘big ticket’ items, has withdrawn its full-year guidance as sales fall.
Made.com, which had considered turning to the markets to raise more funds, now says the dire conditions are “not favorable at this time to raise enough funds from public market investors”.
The retailer, which debuted on the stock market last year, is undertaking a strategic review by examining options such as debt financing, finding a strategic investor, selling the business or merging with another company.
“While the group has had a number of strategic discussions with interested parties, the group has not received any approach, nor is it in discussion with a potential offeror, at the time of this announcement,” the company said, who appointed PwC to manage the strategic review and sales process.
Shares in Made.com, which has issued three profit warnings this year, have fallen 98% to just 4p since its IPO in June 2021. Its market value has plunged from £775m to £15m pound sterling.
Since the start of the year, the London-based company has implemented measures to try to preserve its finances, including limiting forward purchases of inventory, implementing a hiring freeze, halting spending on marketing and reducing capital expenditure.
“In order to further extend the group’s cash trail, the board has concluded that costs still need to be reduced and a process has begun to implement further cost reductions, including a strategic headcount review, in the coming weeks,” the company said.
The Financial Times reported that the job cuts could represent 35% of Made.com’s workforce, which 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 warehousing capacity due to lower consumer demand. Customer service will be outsourced to a third party.