Half year losses widen at MADE; implements restructuring

Online furniture retailer Made.com has reported widening half year losses as ‘significant reduction in demand’ continues to impact the business.

According to its interim results for the six months to 30 June 2022, total sales rose 4.2% to £178.2m from £171m against the same period last year. However, gross order value decreased 18.8% to £173.6m from £213.9m.

Pre-tax losses widened from £10.1m to a loss of £35.3m, while its cash balance resulted at £32.1m, significantly down from £175.3m in 2021.

Taking a closer look at MADE’s top line performance, UK sales dipped 22.1% to £88m from £113m, while EU sales were down 14.8% to £86m from £101m. Active customers in both markets reduced by 8% to 557,000 and 1.1% to 613,000 respectively, while order volumes also declined 29.3% to 320,000 in the UK and 21.5% to 332,000 in the EU.

Under MADE’s transformation programme, the business has taken several steps to reduce warehouse and showroom space, as well as a restructuring of headcount, with the two initiatives expected to save around £13m in costs.

However, resizing the business is currently expected to incur £3.7m of non-recurring restructuring charges, with MADE aiming for the majority of the plan to be implemented by the end of 2022 and the financial benefit realised in 2023.

MADE has also recently announced the appointment of PricewaterhouseCoopers LLP (PwC) as its advisor over a formal sale process as part of its strategic review (read more here).

As for new parts of the group, MADE said that the integration of Trouva, an online platform that offers a curated range of homewares and lifestyle products, is ‘progressing well’, with products from Trouva boutiques now available for MADE customers via a product bridge with the MADE website.

Furthermore, Republic of Ireland was relaunched in the period as MADE’s ninth market, with an ‘encouraging early response from customers and with structurally attractive contribution margins from launch’.

Nicola Thompson, Chief Executive Officer, said: “The first half of the year was a challenging time for the global economy and particularly for the retail sector. The Group has faced a significant reduction in demand which has been difficult for the business and its stakeholders.

“Although we took immediate action to adjust inventory levels and control costs and have launched a transformation plan that will make the business more agile and resilient, we believe that the decision we have taken to launch the Strategic Review and Formal Sale Process, is the best route to protect shareholder value.

“MADE is not alone in being hit by supply chain problems and the cost of living squeeze, but we are confident that MADE has a strong brand, an excellent product range and a large and loyal customer base across the UK and Europe.”

Looking ahead, MADE added: “As a consequence of the volatile trading environment and ongoing pressures on consumer in the UK and Europe around cost of living pressures, combined with the unexpected events of the past two weeks in the UK compounding the deterioration of trade and the current financial position of the Group impacting its trading stance, the continued uncertainty means that Board has concluded that it is appropriate to withdraw its full-year guidance.”

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