Digital homewares brand Made has warned that profitability in 2022 will be adversely impacted by around £20 million of non-recurring costs, associated with stock and distribution.
It said the costs focus on the additional promotional and clearance activity needed to clear excess inventory, as well as additional costs in the supply chain due to port disruption and extra handling at its warehouses.
It said the biggest impact of these costs were in the first half and are expected to “substantially normalise” in the second half as a result of reductions in inventory levels.
The management team is said to be actively addressing all non-strategic fixed costs, with a particular focus on forward stock buying, warehousing and sourcing markets, as well as reviewing its operational structure and headcount.
Made.com Group has also been hit by worsening consumer confidence which has impacted demand for discretionary big-ticket items.
Nicola Thompson, chief executive officer of Made.com, said: “It’s clear that things are tough for consumers at the moment. Understandably, we’ve seen a worsening in consumer confidence since May and this has had an impact on this period’s performance. As such it’s prudent for us to take a conservative view of what we can expect in the second half of this year.
“To enable us to continue executing on our strategy we’re taking steps to address the non-strategic costs in the business, as well as considering options to allow us to strengthen the balance sheet sufficiently to navigate what will undoubtedly continue to be challenging conditions. We’re confident that this will put us in a strong position for the coming years.”