Shares in U.K furniture group Made.com have collapsed 90% since the company failed to find a buyer late Tuesday and consequently suspended customer orders.
In a statement to the market on Wednesday morning, the company said its operating subsidiary Made Design has temporarily suspended new customer orders as it relies on funding from parent group Made.com
and is looking to “preserve value for its creditors.”
Earlier this month, the London-listed retailer warned the market that it was considering job cuts and needed around £70 million ($81 million) over the next 18 months to preserve its sustainable profitability goals.
On Tuesday afternoon in London, the company said its discussions with possible buyers had been “terminated” as they were unable to meet Made.com’s timetable.
From 770 pence on Tuesday afternoon, shares tumbled to historic lows of 0.50 pence by market close as a result of the failed rescue plan. They rallied 30% on Wednesday morning to highs of 0.90 pence, but most recently pared back to trade at 0.55 pence.
“The pressures on consumer-facing stocks are brought into sharp relief by the collapse of a rescue deal for online sofa seller Made.com, which has left the company teetering on the brink,” said AJ Bell head of investment analysis Laith Khalaf, said in a note.
The company has been in crisis mode for some time as the economic downturn turned away consumers from pricey homeware purchases.
It reported a £35.3 million pre-tax loss for the first half of 2022, a significant drop from the £10.1 million the year prior.
“The first half of the year was a challenging time for the global economy and particularly for the retail sector,” Chief Executive Nicola Thompson said at the time.
Made.com put itself up for sale in late September after being unable to attract investors to an equity fundraising, causing the firm to lead a strategic review which would look at debt financing, a possible sale or strategic investment.
In 2021, Made.com raised £100 million in a £775 million IPO. Shares are now 99% below its listing price of 200 pence when it entered the London Stock Exchange.