Made.com is on the brink of collapse after talks between the struggling furniture retailer and potential bidders ended without agreement.
The company, which only listed on the London Stock Exchange in June 2021, appears to be lining up PwC as administrators after a tumultuous year.
It added that Made.com is no longer in receipt of funding proposals or any possible offers for a potential buyout.
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Company shares plummeted 90pc to below 1p following the announcement
As I’ve been saying around and about for some time now. Some people were very flattered indeed by the cyclical rise in online sales during lockdown. A rise which then disappeared back to trend when lockdown ended.
Others, like Boohoo, benefitted from that same cyclical surge but it’s possible that there’s also a structural change in their favour.
We can see that online has been steadily eating bricks and mortar retail. There’s that spook upwards on Black Friday every year which fades back, but the trend looks like 1% of the market a year.
Then there’s lockdown and that jumps by 10 and then 20% of the entire retail sales of the country. At which point we’ve all got a bet to make. Is this an acceleration of that structural change? Have we fast forwarded two decades? Or is it just some temporary, cyclical thing. You know, all the shops are shut, so, of course – and it will all fade back to that trend?
The answer is that we’re more or less back to trend, to that 1% a year. But we didn’t know that two years back. This has had its effects. Look at the example of Made.com. Came to market off the back of figures wondrously plumped by that leap in online, now worth pennies and wondering whether it will even stay in business.
Whether something’s a structural, or merely cyclical, change does, rather, matter.
Oi! What’s that symbol on the 5 key on yer keyboard? USE IT!
There’s a rough observation I have of retail, that if something is being sold in big sheds, the internet will struggle to beat it:-
– large supermarkets
– DIY stores
– car warehouses
– IKEA
– Argos
– discount clothing retailers like Matalan
Because you’ve built a warehouse with tills, so the retailing bit doesn’t have much cost for the number of customers coming in, or fitting out shops and they’re generally on the edge of town, so land is cheap. And even if the cost is slightly higher than online, you get things like no delay, or being able to see/touch the product.
So, Made might have done well when no-one wanted to go to IKEA, but there are advantages to IKEA.
@BoM4
Good point. Add in that with online somebody needs to pay for delivery, but in retail the customer comes and picks up the goods “for free”
Re: BoM4 Argos is slowly disappearing from the High Street and increasing its delivery business.
It will be another Amazon before long
Argos moved into Sainsbury’s stores. I assume they don’t pay as much rent overall by shutting their own stores. Virtually all the bricks & mortar outfits you have heard of in the UK have an online presence too. The only things I want to go to the store for are food (I like to choose fresh stuff), clothes, for getting the fit right, and I like to sample the books in charity shops.
Some bricks and mortar stores aren’t helping themselves though by appearing to have given up or just become a display site for the online sales by and holding limited stock and items so the advantages of go look buy take home are gone. The successful big shed ones you can walk out with what you want.
One local retailer ran a spoof ad as if they were an online business, instant delivery/checkout, try stuff on, simple returns etc so clearly some are realising their advantages