Jobs and orders under threat as Made goes bust
HUNDREDS of jobs are at risk and customers face uncertainty about their orders after Made.com confirmed it was going bust.
The online furniture retailer is appointing administrators from PwC after failing to secure a rescue deal and running out of the cash needed to stay afloat.
It represents a spectacular fall from grace for a company valued at £775m a little over a year ago.
Shareholders – including cofounders Brent Hoberman and Chloe Macintosh – have seen their investments wiped out following Made’s months-long survival battle. Shares were down 99pc by the time it threw in the towel.
The consumer group Which? said it will also be ‘concerning’ for customers with orders placed or those who want to make returns. Shoppers who have paid for items costing more than £100 using a credit card can be refunded by their bank. Others may be left in the lurch as the chance of orders being fulfilled is slim.
The collapse raises questions for Made’s 500 staff, who may not keep their jobs now the firm is in administration. Made had already slashed 200 jobs this year to cut costs and shore up its finances.
It is also a blow for the entrepreneurs who set up Made – Hoberman, Macintosh, Julien Callede and Ning Li, who founded the business in west London’s Notting Hill in 2010 to make high-end furniture accessible to everyone.
It was a success story and was seen as a disrupter in the industry, convincing many people to buy sofas, beds and other items online for the first time.
Made tapped into the zeitgeist – providing trendy furniture at affordable prices. It grew fast and by 2020 it had sales of £315m.
Its success had bankers circling, and in June 2021 it floated on the London Stock Exchange, valued at £775m. The float underscored Hoberman’s reputation as a top tech entrepreneur and was redemption for his previous stock market disaster – Lastminute.com – which he took public with Martha Lane Fox in 2000. Lane Fox was sacked this week from Twitter’s board as Elon Musk took sole control of the social media company following his £38bn takeover.
Hoberman ( pictured right) stood down as chairman of Made in 2016 and had left its board by the time of the float. He has set up the £250m venture capital firm Firstminute.
Friends with the Notting Hill set of Tories, including George Osborne and David Cameron, Hoberman is renowned as a tech investor and networker, best known for his Founders Forum event which takes place once a year to bring together ‘ tech bros’, businessmen and politicians.
Hoberman said the decision to list Made on the stock market – five years after he left – ‘surely pushed the board to go for riskier growth and morph away from the inventory-light model’.
He said his preference while at the company was ‘to seek a trade sale rather than risk the mood of the markets with an IPO’.
Macintosh, who was Made’s chief creative officer until 2015, has since taken on the world of sexual wellness. Her latest venture, Kama, is a sex, love, and intimacy mobile phone app that aims to help users have better sex.
Li has been on Made’s board since it joined the stock exchange, but stepped down as chief executive in 2017 before setting up the French beauty business Typology.
He said on LinkedIn that Made’s demise was ‘heartbreaking’ and blasted bosses for dropping its focus on simplicity.
Made’s demise is a blow for the tech sector at a time when Prime Minister Rishi Sunak is desperate for it to thrive. It went public amid a flurry of listings by so- called Covid winners including Deliveroo, Moonpig and Virgin Wines. Questions were raised about its lofty valuation, which Shore Capital retail analyst Clive Black said was always ‘ludicrous’. Its downfall is seen as a result of poor decisions by bosses, as well as supply chain chaos and the rising cost of living.
One of the main factors was its decision to spend much of the £100m from its listing to build up stock – having previously fulfilled orders once they were received. This left it paying a fortune to store furniture it couldn’t sell. Made eventually turned to flogging its products at a discount. One source said much of the cash it raised was ‘p****d up the wall’ on stock and marketing. After a string of profit warnings, Made hoisted the for- sale sign in September and told potential buyers it needed up to £70m to survive. Its collapse looked inevitable after buyers backed out and Made.com turned new customers away. PwC will sell stock, its brand and other assets, dividing the proceeds between the taxman, staff and other suppliers and partners.