Made.com is looking to cut costs and fine-tune its strategy ahead of a fundraiser this year which is expected to raise around £50million
The online furniture and homewares retailer said Thursday that a share offering was one option it was considering.
Bankers warned the company would find a £50m share offering challenging given its current market value is just £38m. They added that Did had to put out a revised narrative like the peer AO World had done.
The electronics retailer raised £40m in July however, promised investors it would raise underlying profit margins to 10 percent by the end of the year by focusing on the UK and closing its German branch.
“Made is one of several Ecommerce Companies where the profits have not arrived in the way they had once imagined,” said one banker. “They could make it clear when they expect positive cash flow.”
at his IPO last year, Made set a firm target of £1.2bn in annual sales by 2025 but had vaguer ambitions in terms of profitability and cash generation. As equity markets corrected, promises of rapid revenue growth made investors less persuaded.
Made had a tough first year as a public company. Delays and bottlenecks in global supply chains forced the company to provide more cash for inventory. But it was hit by a drop in demand as consumers pulled back and it was forced to slash prices to shed excess inventory.
It already has greatly reduced sales and profit targets for the current year and said it would “review all non-strategic fixed costs” in response.
It has no debt but said in July it expects to start its fiscal year with just $5 million in net cash.
It has since hired PwC to advise on cost-cutting plans, as reported by Sky News.
https://www.ft.com/content/6a48e3cd-d7c7-43bf-af62-c8b8411064c5 Made.com is considering raising fresh equity after a difficult year