Online Car Dealer Enters Administration
Online car seller Cazoo has plunged into insolvency, placing over 200 jobs at risk. The company, once a highly valued British tech firm, appointed administrators from Teneo to oversee its remaining marketplace business. This move follows a significant restructuring effort aimed at survival, during which Cazoo had already cut hundreds of jobs.
From Tech Unicorn to Insolvency
Founded by former Zoopla CEO Alex Chesterman, Cazoo was once valued at over £6.3 billion (€7.4 billion) after its 2021 listing on the New York Stock Exchange. However, rising interest rates and increased competition from rivals adopting similar online sales models pressured the loss-making business. Recent declines in the value of used cars and reduced demand for electric vehicles exacerbated its financial troubles.
Continued Job Cuts and Ongoing Discussions
Since March, Cazoo has cut 728 jobs as part of drastic cost-cutting measures. The administrators plan to retain the remaining 208 staff during the administration process. Matt Mawhinney, joint administrator at Teneo, stated they are in discussions with several interested parties regarding the marketplace business and customer collection centers, expressing optimism about securing a sale.
Strategic Shift to Marketplace Model
In March, Cazoo began a major restructuring, transitioning to a pure marketplace platform where users can buy and sell cars. This shift involved selling off its entire vehicle inventory and divesting several repair and customer collection centers to Constellation Group, the parent company of Cinch and WeBuyAnyCar. The marketplace model has performed above expectations, attracting strong dealer sign-ups.
Future Prospects Amid Administration
The administration provides an opportunity for a potential sale of Cazoo’s marketplace business in the coming weeks. Despite its recent struggles, the company continues to engage with interested parties, hoping to secure a future for its remaining operations. The outcome of these discussions will determine the fate of the remaining employees and the company’s position in the online car sales market.
SOURCE: Ref Image from Time Series
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