Yahoo Finance Next buys Made.com for just £3.4m a year after it was valued at £775m
Next has swooped to seize control of Made.com for £3.4m, after the online furniture retailer crashed into administration, leading to hundreds of job losses.
Next confirmed that it had bought the Made.com brand, domain names and intellectual property out of administration, following a major fall from grace by the furniture retailer. When it floated in the summer of 2021, Made.com had been worth £775m.
More than 300 Made.com workers are being made redundant today with 79 others who had been working their notice period let go with immediate effect.
Lawyers warned of a risk of legal action from how the process was managed, with staff claiming they were told of redundancies over Zoom on Wednesday morning. Law firm Aticus said it had already been instructed by several Made.com staff to pursue claims to get up to eight weeks' worth of pay in compensation.
Administrators at PwC also said a large proportion of customer orders will no longer be delivered, many of which were in the process of being made in the Far East.
Nicola Thompson, chief executive of Made.com, apologised to customers, staff and shareholders. She said: "Over the past months we have fought tooth and nail to rapidly re-size the cost base, re-engineer the sourcing and stock model, and try every possible avenue to raise fresh financing and avoid this outcome.
"Made is a much loved brand that was highly successful and well adapted, over many years, to a world of low inflation, stable consumer demand, reliable and cost efficient global supply chains and limited geo-political volatility. That world vanished, the business could not survive in its current iteration, and we could not pivot fast enough."
PwC said there had been almost 4,500 customer orders in the UK and Europe which were already with carriers and are being delivered, but that a large proportion of orders "cannot be completed and shipped to customers".
Rachael Wilkinson, joint administrator and director, PwC, said: “We understand those who have paid for products will be really concerned about receiving their items. The administration means many orders unfortunately cannot be fulfilled.”
As well as the 300 job losses, 79 Made.com staff who had been working their notice period have been let go with immediate effect, while "a small number of employees have been retained to support the orderly closure of the business".
PwC will be working to sell the business's other assets, including stock already in warehouses.
News of the deal comes after Made.com founder Ning Li revealed that his offer for the business had been rebuffed. It is thought that Mike Ashley's Frasers Group had also been among those interested in snapping up Made.com, a business which had seen its value dive over the past year. It was worth around £2m last week, before shares were ultimately suspended.
Writing to Made.com staff earlier this week, Mr Li said he had been willing to put up his own money for the offer after having been unable to raise cash from outside investors. However, he said his proposal had been rejected.
"Apparently, it would be preferable to break the company up and sell it in pieces to generate a little more cash, rather than saving jobs and honouring our customers. It makes no sense to me. But I wanted you to know that I really tried."
Mr Li founded Made.com in 2010 together with serial entrepreneur Brent Hoberman and Chloe Mackintosh.
It follows a major cash crunch at the furniture retailer, amid surging costs and as cost-of-living concerns dampened demand for big-ticket purchases.
Last month, Made.com said it needed a cash injection of between £45m and £70m to stay afloat, and was going on the hunt for new investment or a buyer. However, it later ended the process after failing to find anyone willing to put fresh cash into the business and stopped accepting furniture orders in an effort to preserve value for creditors.
By the end of June, it owed suppliers and warehouse owners at least £75m, after having stocked up its warehouses in a bid to avoid supply chain turmoil.
Susanne Given, chairman of Made, said: "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.
"We appreciate and deeply regret the frustration that [Made.com] going into administration will have caused for everyone."
