MADE.com shares collapse after strategic review

[MongiIG]

Online furniture retailer MADE.com's share price has lost another 25% this morning after the company said it was undertaking a strategic review involving every possible cost saving measure.

 

 Jeremy Naylor | Writer, London | Publication date: Friday 23 September 2022

MADE.com's strategic review

The online furniture retailer in the UK, Made.com Group PLC, has decided to undertake a formal strategic review of its various options in the market.

The group says it will implement additional cost reductions, including a headcount review, within the next few weeks and also the possible sale of the business. Now, we've seen the stock down 25% as a result of this news today.

Share price chart

Let's take a look at the share price chart, which shows clearly the big declines that we've seen on the far left hand side of this chart going all the way back to mid-June 2021.

We saw this company list on the market for 200 pence a share - £2 a share. Since then it's been pretty much one way traffic. We're down now at 4.7 pence a share. We're down at the moment by margin of 19%. We had been down as much as 25% today.

Yesterday, the FT was reporting that MADE.com will shed more than a third of its workforce. Now, while this was not specifically mentioned by MADE.com today, it did say that deteriorating market conditions force it to either seek a buyer or raise more cash.

Well, that in itself is made near impossible because of the collapse in the market value. Shares are down heavily again today. Now, it is a consequence of the business model, where supply chains are spread far and wide around the globe, including China, where COVID restrictions have forced a lot of businesses with vulnerable margins to rethink their sourcing of materials and labour.

And this company is really a business that looks, at the moment at least, to be in total failure. It is currently down at 4.7 pence, will it find a buyer at these levels?

One has to wonder whether they will, because obviously within the consumer sector, other companies like DFS Furniture Ltd, Sofa World, Sofology, are all in a little bit of a tight corner with regard the consumer. Are they the ones to come to the rescue of MADE.com? We'll have to see what happens.