Unable to withstand the "cold winter"! Listed furniture e-commerce giant enters bankruptcy liquidation

The cross-border e-commerce market this year has been hit hard, with news of various platforms and companies going bankrupt being common .

Made.com board officially enters liquidation

Recently, Made.com, a British furniture e-commerce company that announced its closure last month , announced that its board of directors has proposed to formally end all of the company's operations through member voluntary liquidation.

Made.com said the members' voluntary liquidation would allow the company's remaining assets to be assessed before administration is completed.

Affected by inflation, British consumers are facing a continued cost of living crisis and have to cut back on daily spending and purchases of household products. Made.com 's business has been directly affected and it fell into bankruptcy management in November this year.

Subsequently, British retail giant Next announced that it would acquire Made.com for £3.4 million, after which they would acquire its website, brand, customer database and other intellectual property rights.

In the first half of this year, Made.com's sales were 178.2 million pounds, a 4% increase over the same period last year, but its pre-tax loss reached 35.3 million pounds, compared with only 10.1 million pounds in the same period last year.

Last month, Made.com had no choice but to shut down its website after attempts to win orders failed.

To help creditors recover funds, Made.com will auction off thousands of sofas and tables left in the site's inventory .

It is understood that Made.com was founded in 2010. Since then, the company's sales performance has been booming and its business has expanded to Germany, France, Spain, Switzerland, Belgium and other countries .

In 2021, Made.com successfully listed in London, raising 100 million pounds and reaching a market value of 775.3 million pounds.

However, since the company went public, it has issued three profit warnings and expects losses this year to reach up to 70 million pounds.

In September of this year, Made.com announced that it would lay off about 35% of its employees by the end of October and integrate its supply chain in Europe and Vietnam, while closing its business in China and reducing warehouse capacity.

As of October 25, 2022, Made.com's share price plummeted 93% to 0.5 pence per share , and its total market value fell below 2 million pounds.

As the market environment deteriorated , Made.com eventually closed down.

Made.com stated in its closure announcement that the company is facing long-term difficulties mainly for two reasons. First, the current economic situation has caused consumers to reduce spending on home products. On the other hand, it is affected by the supply chain and increased product costs.

Multiple e-commerce platforms and companies are facing bankruptcy, and the industry is rapidly reshuffled!

In this year's cross-border e-commerce market, many well-known e-commerce platforms and companies have declared bankruptcy .

In July this year , Altmeyer Home Stores, an American home furnishings retailer with 81 years of operating history, filed for bankruptcy and liquidation.

Altmeyer's president said in the bankruptcy statement that the home furnishing market has long been facing fierce market competition, and continued procurement difficulties and inflation are the main reasons for the company's bankruptcy. Under the high pressure of the market, the order volume continued to decrease, and the company failed to restore the profitability of its business, so it had to choose to file for bankruptcy.

Bed Bath & Beyond, a well-known American home furnishings company , is facing bankruptcy and is seeking a loan of US$375 million.

In the past six months, sales of 3B home furnishings have fallen sharply. The main reason is that the intensified inflation has caused consumers to reduce spending on household items. At the same time, affected by the supply chain, some products have continued to be out of stock, and some suppliers have also delayed payments or reduced shipments, which has had an adverse impact on the company's operations.

On September 3 this year, Tru-Wood Cabinet Company, a well-known American cabinet manufacturer, announced that it would no longer accept orders for cabinet products, cease all operations, and lay off all employees.

It is understood that the company has a history of more than 50 years of operation and is a member of the American Cabinet Manufacturers Association. The main reason for the company's closure is that it was affected by the market environment and could not obtain new funds or other business opportunities.

In October this year , Eve Sleep, a well-known European home furnishing e-commerce company , announced bankruptcy liquidation due to continued losses and falling stock prices. Its related brands, websites and assets were acquired by another bedding retailer, Bensons for Beds.

In November this year, United Furniture Industries, an American home furnishing giant and the parent company of Amazon's home furnishing brand Lane Home Furnishings, suddenly announced its permanent closure and sent layoff notices to 2,700 employees late at night .

Previously, the company had stated that due to the market environment, the demand for furniture products is declining sharply, the company's order growth is very slow, but the current inventory is very high. In order to ensure the normal operation and long-term development of the company, the company has to adjust the scale of personnel and related businesses. However , despite multiple efforts, UFI still faces the possibility of suspension of business.

In December this year , Brosa , an Australia-based fashion furniture and home decoration e-commerce platform, announced that it had entered Voluntary Administration (a bankruptcy procedure in which a company is voluntarily taken over).

It is understood that as epidemic control is gradually relaxed, Australia's offline real economy has begun to recover. The current global consumer market is in a downturn, and Brosa failed to make correct strategic adjustments to the market in a timely manner. Sales have fallen sharply and the overall business development is facing huge obstacles .

Affected by the international situation, the raw materials of various products continue to rise, and logistics costs have also increased accordingly. Coupled with the continued inflation, prices have risen, consumer purchasing power has declined, and a wave of corporate bankruptcies has swept across many countries. Many former leading companies and e-commerce platforms have gone out of business, bankrupted, or closed down ...

From the internal reasons of the bankrupt companies, it can be seen that they basically have certain defects in their own business models, which make it difficult to retain customers for a long time. After the market dividend recedes, they fail to maintain the original market. In addition, the external competitive environment changes, the company's own capital chain is short, and finally they can only face bankruptcy.

Since the beginning of this year, the global economy has continued to be turbulent, and even the revenue of e-commerce giant Amazon has been affected. According to the third-quarter financial report data released by Amazon, its Q3 operating income was lower than analysts' expectations, a year-on-year decrease of 48%, and the company's net profit decreased by 9% year-on-year. Amazon expects its fourth-quarter revenue to be far lower than expected. In early November, Amazon's market value fell from a record closing level of $1.88 trillion in July 2021 to approximately $879 billion, becoming the world's first listed company to have its market value evaporate by $1 trillion.

Taking the United States as an example, in 2023, the impact of continued high inflation and the epidemic on consumption in the U.S. market will continue.

According to the latest monthly survey of economists by foreign media , the probability of a US recession in 2023 has climbed to 70% from 65% in November, more than double that of six months ago.

The recession has brought uncertainty, with data showing that the most recent consumer price index rose 7.7% year-on-year , and American consumers have become more cautious in their daily spending .

In the coming year of 2023, cross-border sellers will also face huge challenges. How to better avoid market risks and find new growth points becomes crucial.

Bankruptcy

Furniture e-commerce