Made.com, a popular online furniture retailer based in the UK, has recently announced that it will be appointing administrators as it has run out of cash. This unfortunate news sheds light on the tough financial situation many retailers are currently facing, due to the squeeze on household budgets. It is worth noting that Made.com went public just a year and a half ago with a valuation exceeding £775 million ($894 million), making its rapid decline all the more noteworthy.

The squeeze on household budgets can be attributed to several factors, including the rise in energy bills, mortgage rates, and food prices. As a result, consumers are cutting back on discretionary spending, which has had a significant impact on retailers like Made.com. This situation should serve as a warning for other retailers in the UK, as they may also face similar challenges in the near future.

Despite its acquisition of Trouva earlier this year, Made.com was unable to find a buyer and has consequently decided to appoint administrators. This decision comes after the company had already suspended customer orders last week due to its financial difficulties.

During the pandemic, Made.com experienced a significant surge in sales as people turned to online shopping for furniture and home decor while being stuck at home during lockdowns. This boost in sales prompted the company to go public in June 2021. However, the economic downturn in the UK this year has had a detrimental effect on retailers, including Made.com.

A recent survey conducted by market researcher Kantar has revealed that half of Britons plan to spend less on Christmas this year. This decline in consumer confidence can be attributed to multiple factors, such as a 10% inflation rate and a chaotic political climate. This decline in consumer spending has undoubtedly contributed to Made.com’s struggles.

In October, Made.com had already expressed difficulties with supply chain disruptions and higher costs. Furthermore, the company’s management has faced criticism for investing in excessive levels of stock just as customer orders started to decline. These issues have undoubtedly played a role in the company’s current financial situation.

Made.com’s shares have been suspended from trading and will eventually be canceled. PricewaterhouseCoopers has been appointed to handle the administration process, including the potential sale of the company’s trade, assets, or brands.

This news is a stark reminder of the challenges faced by retailers in the current economic climate. The squeeze on household budgets has had a significant impact on consumer spending, and companies must find innovative solutions to adapt and survive. As Made.com becomes one of the first casualties during this difficult period, it raises important questions about the future of the retail industry in the UK and the steps that need to be taken to navigate these challenging times.

For more information about the impact of rising energy bills, mortgage rates, and food prices on household budgets, please visit: Link 1.
To learn about strategies for retailers to navigate the current economic climate, please visit: Link 2.