More than 30,000 Made.com shoppers are collectively owed almost £12m, which they will not get back, according to the latest report from administrators to the collapsed furniture seller.
According to documents filed at Companies House last week, buyers paid 13.7 million pounds for large items such as sofas. However, less than £1.9m has been recovered from customers through card charge-backs, which credit card providers refund borrowers if purchases go wrong.
The document makes clear there will not be enough money to repay the £11.9m owed to customers, who are on the list of unsecured creditors, who are among the last to be paid when the money is recovered from the sale of the company’s remaining assets. The list of unsecured creditors also includes suppliers and certain employees.
Those assets include stock worth around £19m, which is expected to fetch less than £2m via auction.
Med.com’s biggest unsecured creditors are Facebook (£1.4m owed), Google (about £1.7m owed) and the operator of the group’s Antwerp warehouse (£1.8m).
However, Med.com’s main lender, Silicon Valley Bank, is likely to go after the retailer almost all of the £3.8m it owes. It then bought the Made.com brand and database for £3.4m., Most of its staff and HMRC, which owes £3.57m, will also be paid in full.
PricewaterhouseCoopers (PwC) was the administrator of Posted in Made.com on November 9Completing a reversal of fortunes for the London-based retailer, which was valued at around £800m when it listed on the stock exchange in June 2021 and heralded as the future of furniture retail.
Its collapse was the latest example of the bursting of the online retail bubble, after investors who had bet that the switch to online buying during the pandemic would be permanent had their hopes dashed.
More than 300 people were made redundant when the company went into administration and almost all 500 people employed at the time feared losing their jobs.
Retail experts are expecting more retailers to collapse as a result of the cost of living crisis, as rising bills cause consumers to rein in their spending.
However, according to Erin Brooks, managing director and head of retail for Europe at Alvarez & Marsal, it could provide opportunities for larger firms poised to snap up stricken rivals who have bought the Juul and Made.com brands. Deals by Next for. Pointing to further consolidation across the sector outside of governance.
“There are retailers and brands that came out of the pandemic with very weak balance sheets and have now been hit by any supply disruptions and cost inflation as well as low consumer sentiment,” she said. “These still have something to offer, so some of the larger, more robust groups will certainly see opportunities.”
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