Online furniture retailer Made.com has reported a decline in half year sales while revising its guidance, expecting losses to potentially hit £70m.
According to its latest trading update for the six months to 30 June 2022, total sales were down 19% to £174m from £214m against the same period last year.
UK sales were down 22% to £88m from £113m, while EU revenues fell 15% to £86m from £101m.
MADE saw order volumes drop 26% to 652,000, with the UK down 29% to 320,000, although average order value rose 9%.
The retailer said that its Homewares division continued to increase in the sales mix, now up by 2ppt to 30% for H1 compared to prior year as the ongoing range expansion and improved choice is ‘well received’ by its customers.
The Trouva integration, an online platform that offers a curated range of homewares and lifestyle products, is ‘progressing well’ and the first products are expected on the Made.com curated marketplace before the end of September, with over 2,500 products to be made available by end of the year.
Meanwhile, Ireland has been relaunched as its ninth market, with an ‘encouraging early response’ from consumers and with ‘structurally attractive contribution margins from launch’.
MADE added that recent trading has been volatile, and the worsening of consumer confidence has impacted demand for discretionary big-ticket items, making new customer acquisition at ‘financially attractive rates challenging’.
“Profitability in 2022 is expected to be adversely impacted by c.£20m of non-recurring costs primarily in two areas. Firstly, additional promotional and clearance activity related to excess inventory in the business, following the strategic inventory build set out in our prospectus last year,” MADE said.
“Secondly, additional costs in the supply chain due to disruptions at ports and extra handling at warehouses. Both items primarily impacted the first half and are expected to substantially normalise in the second half as a result of reductions in inventory levels.”
Following the results, MADE has updated its guidance, downgrading its sales growth forecast from +8% to -7%, to -9% to -24%. Adjusted EBITDA has also been revised, down from its previous forecast of -£15m to -£35m, to around -£50m to -£70m.
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.
“It’s thanks to the hard work and determination of our team at MADE that we’ve made strong strategic progress over this period, despite the challenging macroeconomics. Looking at our performance over recent years, we have managed to grow the business by 57% since 2019, our last undisrupted year, and increased our market share.
“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.”