Made.com furniture website on brink of collapse

Online furniture retailer Made.com has stopped taking new orders after talks to find a buyer failed, pushing the firm towards collapsing.

Bosses warned if further funding could not be raised before its cash reserves ran out, it would take "appropriate steps to preserve value for creditors".

The firm's share price plummeted after it revealed rescue talks with potential buyers had been terminated on Tuesday.

The company said its decision to halt orders was "under review".

It added "a further announcement will be made as appropriate".

The share price of the company, which employed around 700 staff at the end of last year, closed on Tuesday at just 0.5p a share, after dropping by more than 90%.

Made.com, which was launched in 2011 with £2.5m in funding, was co-founded by Ning Li and Brent Hoberman, best-known for starting Lastminute.com

Chloe Macintosh and Julien Callède also helped start the business.

Lockdown sales surge

Ning Li came up with the idea of sourcing directly from designers and manufacturers and selling their furniture on the Made.com website, targeting a computer-savvy audience.

During the course of the Covid pandemic, the firm's sales surged as people were confined to their homes, could only shop online, and bought more furniture and other home goods.

Sales hit £315m in 2020, a year-on-year rise of 30%, and in the first three months of 2021 they grew by 63% to £110m.

The growth led to the firm listing on the London Stock Exchange in June last year with a value of £775m.

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Russ Mould, investment director at AJ Bell, previously said when Made.com joined the stock market "no-one would have thought the business would have been put up for sale 15 months later after a disastrous trading period".

He said the firm became "unstuck" due to supply chain problems, with "customers waiting months for their sofas to be delivered, leading to cancellations and frustration".

"Then the cost-of-living crisis bit and big-ticket items like a new three-piece were put on the backburner, all contributing to a severe slump in Made.com's share price and a slew of profit warnings," he added.

Although Mr Hoberman is no longer actively involved in the running of the company, he is still a shareholder, as is Ning Li, who was chief executive until the end of 2016 and is currently a non-executive director.