The online furniture retailer Made.com has collapsed into administration after weeks of speculation, leading to 320 redundancies and leaving customers worried about their orders.
The company’s brand, domain names and intellectual property were immediately bought by the fashion and homeware retailer Next.
However, administrators said there were 12,000 customer orders that had been paid for but would not be delivered as they were still in production in Asia or not ready to be delivered.
Administrators from PricewaterhouseCoopers (PwC) said: “We understand that this will be very disappointing and frustrating for customers who have paid for orders in good faith.”
A further 4,500 orders from customers in the UK and Europe, which were already with transport firms, will still be delivered.
The collapse of Made.com completes a reversal of fortunes for the London-based retailer, which was valued at almost £800m when it listed on the stock exchange in June 2021 and was heralded as the future of furniture retail.
PwC will be looking into the company’s other remaining assets and said creditors would be paid according to statutory priority.
Next offered £3.4m to buy the brand but it has not taken on the company’s workers or any of its stock of furniture, lighting and homeware.
The administrators said 320 roles had been made redundant, while a further 79 employees who had resigned and were working their notice have also been made to leave immediately. Made.com employed about 500 people when it went into administration.
The deal with Next represented “the best option available to generate returns for creditors as a whole, under severely limited timescales”, said the administrators.
Zelf Hussain, joint administrator and a partner at PwC, said: “It is with real regret that redundancies will need to be made.” He added that a small number of employees had been retained “to support the orderly closure of the business”.
Nicola Thompson, the chief executive of Made.com, said she wanted to “sincerely apologise” to customers, employees, suppliers and shareholders.
“Over the past months we have fought tooth and nail to rapidly resize the cost base, re-engineer the sourcing and stock model, and try every possible avenue to raise fresh financing and avoid this outcome,” she said.
Thompson added that she hoped a “reconfigured Made” would “prove to be sustainable” under its new owners.
Made.com stopped taking new orders in late October, but thousands of customers face an anxious wait to see whether they will receive refunds for outstanding orders.
PwC is advising customers whose orders will not be delivered to submit a claim as part of the administration.
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Lisa Webb, a consumer rights expert at Which?, said it was not always easy for consumers to exercise their rights when a company fell into administration. “It is always worth trying to claim for a refund in this situation but customers should know it is not guaranteed,” Webb said.
She said the cost of repairing faulty items could still be claimed if they came with a warranty, and added that collapsed companies might not accept returns.
The outlook for Made.com had been darkening for some time before its collapse. Like many other online retailers, its sales boomed during the pandemic when locked-down consumers spent money doing up their homes.
However, these fell away when Covid restrictions came to an end and customers began to complain about long waits and delayed deliveries of their made-to-order furniture.
Made.com warned of job cuts in July as the economic outlook worsened, with increasingly cash-strapped consumers reining in their spending, particularly on “big-ticket” items. The retailer launched a last-minute hunt for a buyer but was unable to find anyone willing to take on the entire company.
Made.com was set up in 2010 by Ning Li and Brent Hoberman, who co-founded Lastminute.com, along with Julien Callède and Chloe Macintosh. Li said in 2017 that Made.com wanted to be the new Ikea, “the pioneer of the next trend of how people shop for their home”.
He said shortly before the firm’s collapse that he had submitted three proposals to Made.com’s board and PwC to buy back the company.
Li said his offer had been rejected, writing in a statement on LinkedIn: “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.”
Administrators are required by law to select an offer for a failing company that will raise the largest amount for its creditors.