UK

Made.com close to collapse after sale talks fail as online furniture retailer stops taking online orders

The company has refused to clarify what will happen to orders still outstanding, only saying the suspension of new orders remained “under review” and that “a further announcement will be made as appropriate”

Pedestrians pass a Made.com Design Ltd. store in London, U.K., on Thursday, May 27, 2021. Online furniture retailer Made is looking to raise 100 million pounds ($142 million) in an initial public offering in London, backed by surging demand amid lockdowns from its core base of millennial customers. Photographer: Chris Ratcliffe/Bloomberg via Getty Images Photographer: Bloomberg Provider: Bloomberg via Getty Images Source: Bloomberg

By Camilla Canocchi

October 26, 2022 4

Embattled online furniture retailer Made.com has stopped taking orders from customers after talks regarding a possible sale of the business failed, pushing the group towards administration.

The company has refused to clarify what will happen to orders still outstanding, only saying the suspension of new orders remained “under review” and that “a further announcement will be made as appropriate”.

The decision to stop taking new orders, which was announced this morning, came after Made.com told investors last night that it had been left with no “funding proposals or possible offers” as talks with a potential buyer had ended.

The retailer said insolvency was on the cards if another company or investor did not come to its rescue soon.

“If further funding cannot be raised, or a firm offer for the company is not received before the company’s cash reserves are fully depleted, the board will take the appropriate steps to preserve value for creditors,” the group said in a statement on Tuesday.

Made.com has seen a remarkable reversal of fortunes since floating on the London Stock Exchange only 15 months ago.

People sprucing up their homes during lockdowns boosted sales at Made.com, but the company quickly became unstuck due to supply chain problems.

Customers cancelled their orders in droves after having to wait months for their sofas to be delivered.

Then the cost of living crisis came, hitting demand for big ticket items like furniture, contributing to a severe slump in Made.com sales and forcing the company to issue several profit warnings.

Last month, it decided to put itself up for sale, after concluding that it would be unable to raise money needed to prop up the company on the public markets in the current environment.

It warned that it needed to secure £70m in funding over the next 18 months to stay alive.

Made was worth £775m when it floated on the London Stock Exchange in June last year. Today the business is worth just £2m.

If customers waiting for their orders never receive them, they can ask for their money back thanks to the The Consumer Rights Act 2015.

Consumer champion Scott Dixon said: “Customers can raise a chargeback with their bank or credit card provider and cite “breach of contract” under the Consumer Rights Act 2015 to reverse the payment instead as it’s an unfulfilled order and contract.

“This can be done within 120 days of an order being placed and accepted.”