Made is calling in the administrators, it announced this morning. Shares in the business have been suspended ahead of that.
The move comes days after the homewares pureplay said last week that a sale process that started in September as part of a strategic review of its future options in the light of fast-rising costs and falling customer confidence had come to an end since it no longer had any potential offers. It returned to the strategic review and has now concluded that administration is now its best option. It expects to call in PricewaterhouseCoopers (PwC) as administrators, who will now handle any sale of its business, assets and brands.
Made suspended ordering on its website last week. Today, in FAQ answers on its website around its administration, it says: “The recent changes in Made.com’s circumstances means that we are not currently able to process returns, refunds or order cancellations. Our customers are incredibly important to us and we realise this is disappointing. Although we currently don’t have timings, we hope to be able to restart processing refunds soon. We’re very sorry for the inconvenience caused.”
Matt Walton, senior data analyst at GlobalData, has suggested that the retailer is likely to follow Eve Sleep in being acquired out of administration in a pre-pack deal. Walton suggests that private equity group Sun Capital would be likely to consider it, having previously supported both Dreams and ScS. “Another name likely to consider it would be Frasers Group, which already owns Sofa.com and would offer it another more premium brand for its House of Fraser stores,” he says.
Made was founded in 2010 as a platform that promised to give customers the ability to order directly from furniture designers, cutting costs by removing the retailer from the equation. By 2019 it was succeeding in its mission of building a brand for a millennial generation that was happy to order relatively expensive products online, and it was expanding across Europe, with operations in seven countries. That number has since increased to nine European markets, with seven showrooms that include flagships in London and Paris – boosted by customers moving online in a way that appeared to have accelerated a process that online retailers saw as inevitable.
When Made floated on the London Stock Exchange in 2021, its then-chief executive Philippe Chainieux said the business was “excited to embark on our next chapter as we act on the huge opportunity for growth and deliver on our vision to become the leading home-lifestyle destination in Europe for the digital native.”
But Made has been hit by a series of events that started with high demand during Covid-19 pandemic lockdowns, at the same time as supply chain delays. It expanded its warehousing in order to reduce delays – but the rising cost of freight post-pandemic, coupled with rising energy prices in the wake of Russia’s invasion of Ukraine meant rising costs at the same time as consumer confidence has been hit hard – with the homewares market particularly badly affected.
At the same time, shoppers have more generally returned in-store to buy, although still making more of their purchases online than before the pandemic. In its latest half-year, to June 30 2022, Made revenues grew by 4.2% to £178.2m, compared to a year earlier, and pre-tax losses widened to £35.3m as demand reduced and the retailer had to discount to clear stock.
The news comes days after ONS figures showed a 40% rise to 5,595 business insolvencies in the third quarter of this year, to the end of September, with small businesses particularly badly affected. PwC analysis shows retail was the second highest category, with 2,910 insolvencies, after construction (3,949).
Made is ranked Top250 in RXUK Top500 research.