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Made puts its future options and staffing levels under review as consumer spending falls and costs rise fast

Image courtesy of today says it’s reviewing its strategic options and rethinking staffing levels at a time when sales have been hit by rising inflation and falling consumer confidence. Made says that in the 15 months since its stockmarket flotation it has been affected by two major headwinds that now mean it has to withdraw its full-year guidance.

Firstly, it has seen fall in spending at a time when it had stocked up in order to deliver faster to customers. That now means it is overstocked, with cash tied up in working capital and is faced with discounting in order to sell at a time when customer acquisition costs are rising. 

Secondly, supply chains have been disrupted, resulting in lower reliability and significantly higher costs. In the second half of 2021, Made’s freight costs rose to £45.3m from £8.2m in the period period in 2020 – impacting profit margins in a way that it hasn’t been able to fully pass on to customers. Cost inflation in its supply chain, says Made, has continued through the first half of this year, with freight rates and carrier costs now structurally higher. The effect of the Russian invasion of Ukraine on fossil fuel prices has raised fulfilment costs further, in areas from last-mile delivery to carrier fuel surcharges. 

Made says it has action it has taken to manage its costs and cash flow include reducing forward buying and putting a hiring freeze in place, cutting back on marketing introducing a new marketplace model that doesn’t require it to have the stock in place as well taking the first steps to start sourcing from Europe. 

“In order to extend the group’s cash runway further, the board has condoled that costs must be reduced further and a process has commerced to implement additional cost reductions, including a strategic headcount review, within the next few weeks, whilst retaining appropriate skills and resources to be able to conduct the strategic review process effectively,” Made says in today’s statement

As a result of uncertain trading conditions, the retailer’s board has concluded this is not a good time to raise equity on the markets and has instead embarked on a strategic review investigating possibilities that range from from debt financing to looking for outside investment, an outright sale or a combination of these. 

It has appointed PricewaterhouseCoopers to advise it on the strategic review and formal sales process, while JP Morgan Cazenove is advising it on the Takeover Code. 

Made says that while it has had discussions with interested parties, no formal offer has been received. is ranked Top250 in RXUK Top500 research.

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