MADE to cut jobs as it launches strategic review and formal sale process

Online furniture retailer has announced the appointment of PricewaterhouseCoopers LLP (PwC) as its advisor over a formal sale process as it launches a strategic review following challenging conditions.

MADE said that it will also look to cut its workforce, which could be as much as a third, as part of further cost reductions within the ‘next few weeks’, but will retain ‘appropriate skills and resources to be able to conduct the Strategic Review process effectively’.

The board also considered raising new capital to strengthen the balance sheet, which has been impacted by declining consumer spend and supply chain problems. However, prevailing conditions are not ‘supportive at the current time of raising sufficient equity from public market investors’.

“As a result, the Board has decided to undertake a Strategic Review, which will involve a broad range of options to either facilitate raising additional funding, for example through debt financing, through a strategic investment by a business partner or other market participant, by realising value from a sale of the Group – or its business and assets – or through a business combination with another entity with sufficient funding for the combined group,” MADE said in a statement.

MADE has appointed PricewaterhouseCoopers LLP (PwC) as its financial adviser with regards to the Strategic Review and formal sale process.

In the same announcement, the company outlined the several steps it has taken to manage costs and cash flow following the challenging conditions. MADE said: “These actions include significantly reducing the level of forward purchases of inventories, reducing capital expenditures, implementing a hiring freeze, removing planned spend from brand marketing activity, and laying the foundations for opening European sourcing and a new marketplace non-stocked operating model.”

One particular area of increased costs relates to freight disruptions including shipping delays and higher costs. MADE said it has been ‘adversely affected by these events’.

“In the second half of 2021, significant increases in market spot rates for freight contributed to a rise in freight costs from £8.2 million in 2020 to £45.3 million in 2021, which the Group has not been able to fully pass on to its customers during a tightening consumer macroeconomic environment, resulting in depressed margins.”

As part of the formal sale process, MADE added that interested parties should contact PwC where the group will then provide certain information on its business, following which interested parties shall be invited to submit their proposals to PwC. The Group will update the market in due course regarding timings for the formal sale process.

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