Made.com has cut its revenue and profit forecasts and warned of job cuts as costs rise and customers reduce spending on “big ticket” purchases because of the cost of living crisis.
The online furniture retailer issued its third profit warning in less than a year on Tuesday saying that recent trading has been “volatile” and that it now expects annual losses of £50m to £70m, up from a previous forecast of £15m to £30m made in May.
“It’s clear things are tough for consumers at the moment,” said Nicola Thompson, chief executive at Made.com. “As such it’s prudent for us to take a conservative view of what we can expect in the second half of this year.”
Shares in Made.com, which have lost almost 90% of their value since the company floated at 200p last June, plunged 38% to 24p on Tuesday morning.
The company said that sales in the first half were down 19% year on year, but up 55% compared with the first half of 2019, adding that “management is considering options to allow the company to strengthen its balance sheet”.
Made.com said it expects to book £20m more in costs this year because of disruptions at ports, extra handling at warehouses and promotional and clearance pricing of excess inventory.
The company, which said it expects gross sales to fall by 15% to 30%, compared with a previous forecast of flat to down 15%, said it is seeking to make £15m in savings.
“The management team is actively addressing all non-strategic fixed costs across the business to enable the return to attractive unit economics and ensure the business operating model is flexible for the new environment and better positioned to deliver the long-term strategic goals,” the company said. “Areas of focus include looking at forward stock buying, warehousing and sourcing markets, and reviewing our operational structure and headcount.”
July 19, 2022 at 02:28PM Mark Sweney