NEXT acquires collapsed furniture retailer Made.com
NEXT, the fashion, beauty and home retail giant, is continuing to expand its empire acquiring collapsed furniture retailer Made.com out of administration for just £3.4 million.
Made.com was founded by entrepreneurs Ni Ling and Brent Hoberman in 2010. Ling stood down as CEO in 2017 and remained a shareholder (he is now at the helm of another of his ventures, skincare brand Typology). The Made.com business was floated on the London Stock Exchange in 2021 in an IPO that valued the business at £775 million.
In a sharp reversal of fortune Made.com, ran into trading difficulties due to a combination of the global supply chain and cost-of-living crises. The business takes pre-orders for furniture and home accessories, groups the orders, and then commissions factories to make them, thus enabling it to offer more competitive pricing to its customers.
It also crowd-sources furniture designs by asking customers to vote on their favourites and putting the most popular designs into production. While the model is innovative and low-cost, it can lead to waits of several months for products. When the business ran into trouble, new orders were suspended but it says it will fulfil orders that have already been produced and are in the process of being shipped. Those orders that have gone into production in the Far East, but which have not been completed, will not be fulfilled.
The company had been searching for a buyer but the process failed and shares were suspended on 1 November. Yesterday, Made.com’s operating subsidiary, MDL, was forced to appoint administrators from specialist firm PwC who immediately tied up the deal with Next. Frasers Group was also said to have been interested in the business.
Made.com chair Susanne Given said: “Having run an extensive process to secure the future of the business, we are deeply disappointed that we have reached this point and how it will affect all our stakeholders, including employees, customers, suppliers and shareholders.
“We appreciate and deeply regret the frustration that MDL going into administration will have caused for everyone.”
Given added: “I want to sincerely thank all our employees, customers, suppliers and partners for your support throughout the past 12 years, and especially during this difficult time where we have tried so hard to find a workable solution for the company and all its stakeholders.”
As well as an office in London, the business has offices in Berlin, Amsterdam, China and Vietnam and employed nearly 600 staff. Only a small number have been retained. In a statement, administrators at PwC said: “Today’s transaction does not include staff. Consequently this will sadly result in 320 redundancies across the business today. In addition 79 employees who had resigned and were working their notice have been released with immediate effect."
The move marks another expansion of the NEXT empire, which has recently acquired a more-than 50% stake in premium fashion retailer REISS and struck up joint ventures with American brands Victoria's Secret and GAP to run their UK operations. It has also expanded its retail portfolio with new stores dedicated to Home & Beauty.