Struggling Wall Street-listed British online car seller Cazoo has been placed into receivership, its bankruptcy trustees announced in a statement on Tuesday.
“After their appointment, the (judicial) administrators will continue to manage the company, which employs around 208 people,” consulting firm Teneo, in charge of the recovery, said in a statement.
Cazoo announced in early May that it was on the verge of bankruptcy, amid difficulties in finding financing and high interest rates that are undermining the automobile market. Administrators expect a “significant number” of the remaining employees to be absorbed by new employers, stating that they are “progressing their discussions with various stakeholders” from the different components of the group.
Around 124 work for the online sales platform, largely based in London, the rest in collection centers or at the group’s headquarters. Cazoo had experienced meteoric growth after its creation in 2018 and had expanded its activities in several European countries, including France, but announced in late 2022 that it would suspend its operations in the EU to focus on the British market.
A stock market value that falls by 99%
This decision, which was accompanied by hundreds of layoffs, also marked the end of its numerous sports associations in continental Europe. The company went public on Wall Street in 2021 with a valuation of $7 billion. But since then it has lost more than 99% of its stock market value.
Cazoo, which failed to publish its latest annual results on time, announced in October in its third quarter results that the number of vehicles sold and turnover had halved in one year, affected by high interest rates and the crisis. of the purchasing power that weighs on their clients. In late December, Cazoo announced that it had restructured its capital structure and in March focused on its online sales platform by further reducing its workforce (728 layoffs occurred between March 1 and May 17, according to Teneo). .
This refocusing on its sales platform “generates revenue and its performance exceeds expectations,” according to the receivers. Since March, Cazoo has sold its entire vehicle inventory, paid off its associated loans, and has already sold several vehicle repair or pickup centers, as well as its wholesale division.
Source: BFM TV
