Embattled retailers Made.com and Revolution Beauty have raised further alarm bells over their financing and current trading as both businesses battle to secure their futures. 

Online furniture retailer Made.com has withdrawn its full-year guidance, launched a strategic review of the business and formally hoisted the ‘for sale’ sign as it urgently seeks fresh capital.

Nicola Thompson

Nicola Thompson said Made is ‘taking actions to ensure continued success’

The etailer has drafted advisers from PwC to handle the process.

Made said “prevailing conditions” in the market were “not supportive” of tapping investors for cash through an equity raise.

It will now assess a “broad range” of other options to raise cash, including debt financing, strategic investment from “a business partner or other market participant”, or through a merger or acquisition.  

Made also hinted at job losses as it seeks to shore up its balance sheet. It said a “strategic headcount review” would take place within the next few weeks. 

The business said it had been “adversely affected” by a reduction in consumer spending amid the cost-of-living crisis, as well as the “deglobalisation and destabilisation” of supply chains following the war in Ukraine”. 

It said the landscape had made attracting new customers “challenging” and forced it to sell more of its products at discount in order to clear stock.

Made chief executive Nicola Thompson said: “Made is not alone in being hit by problems in the supply chain and the cost-of-living squeeze but we are taking actions to ensure our continued success, supported by our strong brand, an excellent product range and a large and loyal customer base in multiple markets.”

Made only launched its IPO 15 months ago at a valuation of £775m.

But widening losses, a string of profit warnings and the abrupt exit of senior independent director Gwyn Burr have shattered investor confidence in the business and decimated its value. 

Made’s share price slumped to 5.75p when markets closed yesterday, giving it a market capitalisation of less than £23m.

Revolution woes

Meanwhile, Revolution Beauty, which was only listed on the London Stock Exchange in July last year, has recruited independent advisers to conduct a review of the business.

Revolution Beauty said it had appointed Macfarlanes LLP and Forensic Risk Alliance after a series of “serious concerns” were raised by BDO during its audit process.

The beauty business was forced to delay the publication of its financial results after BDO said it could not complete its audit on time.

Trading in Revolution Beauty shares was suspended at the end of August as a result.

The shock developments came less than two weeks after Boohoo snapped up a 7.1% stake in the beauty brand.

Revolution Beauty said there was no timeline for the investigation but warned it could take “several months to complete”.

Alongside details of the investigation, Revolution Beauty said profits for its 2022/23 fiscal year would now be “materially below market expectations”.

The retailer said macroeconomic headwinds, including the ongoing impact of war in Ukraine, spiralling inflation and a fall in consumer spending, would all impact top-line sales during what is traditionally its “seasonally stronger” second half of the year.

During the six months to August 31, Revolution Beauty said it expected to deliver low single-digit revenue gains and a “small” adjusted EBITDA loss.

It also cautioned that accounting adjustments arising from the audit of its 2021/22 year could impact its 2022/23 results. It said there was “no certainty as to whether this will occur or the quantum of any such adjustments”.

Revolution Beauty is already in breach of its revolving credit facility agreement after not filing its audited accounts on time but the business insisted banks “have continued to be supportive”.

Derek Zissman, non-executive director at Revolution Beauty and head of the investigation committee, said: “We are taking BDO’s concerns very seriously and will conduct a full and independent investigation. We will continue to keep investors and stakeholders fully updated as the process continues.”

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