Online used car retailer Cazoo close to collapse
- Published
Troubled online used car retailer Cazoo is close to entering administration, putting about 1,000 jobs at risk.
The move marks a fall from grace for a company that became one of the darlings of the pandemic, when car buyers were forced to make their purchases online.
The firm was launched in 2018 by Alex Chesterman, who also founded the property website Zoopla and LoveFilm, a predecessor of Netflix.
Its popularity during lockdown meant that when it listed its shares on the New York Stock Exchange in 2021 it was valued at $7bn (£5bn). That has now dropped to just $30m.
Cazoo's filing with the US Securities and Exchange Commission, external means it must find a buyer or appoint administrators within 10 days.
It came shortly after the company admitted, external it was struggling to raise money from investors, and said it would miss the deadline to file its annual accounts.
In March, Cazoo said it had sold off its remaining stock and switched to an online marketplace model, allowing car dealers to list their own stock on its platform. It also wound down its European business.
Despite its valuation in 2021, it has never made a profit. In 2022 its losses rose to £704m, external from £544m the year before, and in December it restructured $630m of debt, external. It said it had sold 120,000 cars in the UK.
The company said it had explored "strategic alternatives" to insolvency, including selling off parts of its business, but a buyer has so far not come forward.
The number of people working for Cazoo has dropped sharply in recent years, from 4,500 in 2021 to about 1,000 today.
In January 2023, Mr Chesterman stepped down as chief executive, becoming Cazoo’s chairman, then left the business altogether in December. His replacement as chief executive, Paul Whitehead, stepped down in March.