In a move that has been anticipated for some time, Made.com, the UK-based online furniture and home accessories retailer, has officially entered administration. The company’s appointment of PricewaterhouseCoopers as administrators confirms earlier reports of its struggles to secure a buyer.
Background: Made.com’s Road to Ruin
Founded in 2010 in London, Made.com emerged as one of the UK’s most promising startups, raising $137 million in investors’ money for a business that optimized the entire furniture design, manufacturing, and sales processes through forging close partnerships with partner companies. The company went public on the London Stock Exchange in 2021 at a valuation of around £775 million, although its share price has been in perpetual decline since its IPO day last June.
Growing Losses and Job Cuts: A Decline from Promising Start
The writing had been on the wall for some time. Co-founder and former CEO Ning Li, who left Made.com in 2017, posted an open letter stating that he had made three bids to buy the company back with his own cash and try to turn things around, but was ultimately rejected. "Unfortunately, my proposal wasn’t accepted," Li wrote. "Apparently, it would be preferable to break the company up and sell it in pieces to generate a little more cash. It makes no sense to me. But I wanted you to know that I really tried."
Administration: Next Acquires Made.com’s Assets
In the wake of its administration, news has emerged that Next, a multinational retailer with physical and online stores substantively in the UK, has acquired Made.com’s domain names, intellectual property, and brand for £3.4 million ($3.8 million). The company ceased taking new orders in late October, but reports suggest that none of the interested parties were able to meet the necessary timetable for closing a deal.
Impact on Employees, Customers, Suppliers, and Shareholders
Made.com’s chair, Susanne Given, issued a statement expressing disappointment at the administration. "Having run an extensive process to secure the future of the business, we are deeply disappointed that we have reached this point and how it will affect all our stakeholders, including employees, customers, suppliers, and shareholders." The company is now in the hands of administrators who will focus on selling off its remaining assets and making payments to creditors.
Future Uncertainty: Will Next Retain Jobs?
As Made.com enters administration, it’s unclear what Next’s plans are for the brand or whether any jobs will be retained. The acquisition includes the company’s domain names, intellectual property, and brand, but it’s unknown at this juncture if Next will retain any of the 500 jobs currently on the line.
Lessons from Made.com: Challenges Facing Retailers
The administration of Made.com serves as a reminder of the challenges facing retailers in today’s market. Despite raising significant funding, the company was unable to secure a buyer or turn its fortunes around. The acquisition by Next highlights the need for effective strategies and adaptability in the retail industry.
Timeline: Key Events Leading to Administration
- 2021: Made.com goes public on the London Stock Exchange at a valuation of £775 million
- June 2022: Share price begins decline after IPO day
- 2022: Company reports growing losses and job cut plans
- October 2023: Ceases taking new orders due to lack of buyer interest
- [Current Date]: PricewaterhouseCoopers appointed as administrators, Next acquires Made.com’s assets
Conclusion
The administration of Made.com serves as a stark reminder of the challenges facing retailers in today’s market. Despite raising significant funding and optimizing its business model, the company was unable to secure a buyer or turn its fortunes around. The acquisition by Next highlights the need for effective strategies and adaptability in the retail industry.
