Made.com poised to appoint administrators
Made.com is poised to appoint administrators after efforts to find a buyer for the business failed.
The online furniture retailer, which was last summer worth around £775m, owes suppliers and warehouse owners at least £75m.
It said it was planning to appoint administrators from PwC, putting up to 700 jobs at risk, after ending a sales process late last week when talks with suitors collapsed. The step gives PwC two weeks to find a buyer for all or parts of the business.
Made.com shares have been suspended from trading this morning. Its value had slumped to just £2.5m in recent weeks.
It follows a battle by the company to find fresh funding, after bleeding cash from filling up warehouses with stock in an attempt to avoid supply chain turmoil.
PwC has recently been advising the retailer on cost-cutting efforts. Made.com stopped taking orders for furniture from customers last week, saying it needed to preserve value for its creditors.
In the past year, Made.com has issued three profit warnings and lost both its chief executive and chief financial officer. At the end of June, its cash pile had shrunk by £143m over the past year to £32m.
Pressure has, however, been mounting in recent weeks amid a downturn in demand for furniture as squeezed customers cut back on big ticket buys in the face of higher bills. It has forced Made.com to discount more of its products, hitting its margins.
The company last month said that it needed a cash injection of between £45m and £70m to stay afloat, and was on the hunt for an investor or a buyer. However, those talks later collapsed.
Last week, Made.com co-founder Ning Li criticised bosses at the company for losing focus. He launched the company in 2010 with serial entrepreneur Brent Hoberman and Chloe Macintosh.