(qlmbusinessnews.com Fri. 10th May, 2024) London, UK —
“Cazoo Crisis: UK's Online Car Retailer Nears Collapse, Threatening 1,000 Jobs”
Cazoo, the once-thriving online used car retailer, teeters on the brink of administration, endangering approximately 1,000 jobs.
What was once hailed as a pandemic success story has now turned sour for the company, which soared to prominence during lockdown as consumers increasingly turned to online platforms for their automotive needs.
Established in 2018 by Alex Chesterman, the visionary behind Zoopla and LoveFilm, Cazoo experienced a meteoric rise, culminating in its 2021 listing on the New York Stock Exchange with a staggering valuation of $7 billion (£5 billion). However, this valuation has plummeted to a mere $30 million.
Facing mounting financial woes, Cazoo's recent filing with the US Securities and Exchange Commission stipulates a tight deadline of 10 days to secure a buyer or face administration.
This dire situation follows the company's admission of struggles to attract investment, coupled with its failure to meet the deadline for filing annual accounts.
In a bid to salvage its operations, Cazoo shifted gears in March, liquidating its remaining inventory and transitioning to an online marketplace model, enabling independent car dealers to list their stock on its platform. Simultaneously, the company wound down its European operations.
Despite its lofty valuation in 2021, Cazoo has yet to turn a profit. Its losses ballooned to £704 million in 2022, up from £544 million the previous year. In a move to alleviate its financial burdens, the company restructured £630 million of debt in December.
Amidst desperate attempts to avert insolvency, including exploring various strategic alternatives such as divestment, Cazoo has struggled to attract potential buyers.
The company's workforce has experienced a sharp decline, dwindling from 4,500 employees in 2021 to approximately 1,000 at present.
Following the departure of Alex Chesterman from the CEO role in January 2023, with him assuming the position of Cazoo's chairman, he ultimately severed ties with the company in December. His successor, Paul Whitehead, resigned as CEO in March, exacerbating the company's leadership crisis.
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