The CAR Cazoo dealership is on the verge of collapse and thousands of jobs are at risk.
The company gained popularity during the pandemic after Brits were forced to buy cars online.
Less than a week ago, it was revealed that Cazoo had failed to secure new funding, putting it at risk of falling under management.
It was introduced in 2018 through Alex Chesterman, who also founded the real estate site Zoopla.
In 2021, it was valued at £5 billion on the New York Stock Exchange, but that figure has now fallen to £24 million.
The company has less than two weeks to hire a client or appoint directors.
In a statement sent today to the U. S. Securities and Exchange Commission, the U. S. Securities and Exchange Commission issued a statement to the U. S. Securities and Exchange Commission. According to the U. S. Securities and Exchange Commission (SEC), Cazoo Group said notices have been filed with the High Court with the aim of appointing administrators.
The move provides Cazoo with some breathing room, as creditors will most likely be prevented from taking debt collection actions without legal authorization.
In March, Cazoo began making drastic adjustments to stay afloat, adding that it cut its staff from 4,500 people in 2021 to 1,000 more people today.
Cazoo also sold its remaining stock and switched to an online marketplace model, which allowed car dealers to list their products.
It also severed industrial ties in Europe.
A spokesperson for Cazoo told The Sun: “This marks the latest step in Cazoo’s planned restructuring which started belatedly last year.
“Our new marketplace model, where consumers can buy and sell cars, is generating profits and exceeding expectations, with interest from approximately a hundred car dealers, in addition to many well-known names interested in trading on the Cazoo platform.
“Cazoo has managed to restructure and, in particular, reduce the group’s spending of money, resulting in a money position in excess of £95 million as at 30 April 2024, compared to £113 million at 31 December 2023, and the platform now has around 17,000 cars, or more than £113 million as of 31 December 2023. Double the volume we supported in the past and demonstrates the scalability of our generation and the strength of the team.
“We are moving hard into the next phase of our business and are grateful to our painters for their hard work and commitment. “
Cazoo has one of the UK’s most recognisable car brands and has sponsored billiards and darts tours. . . What went wrong?
Alex Chesterman had raised more than £30 million for his task of breaking into the second-hand market in 2018.
The following year, Cazoo signed partnership agreements with BCA and acquired space, leading to further funding.
In 2019, the platform was officially unveiled and has been described as “one of the UK’s most exciting tech startups” via Car Dealer Magazine.
In 2020, it introduced a multi-million pound advertising crusade and planned to sell £217,000 a year until 2025.
The pandemic has been either a blessing or a curse for the company since 2020 when the company was forced to prevent deliveries due to social distancing rules.
Despite this, Chesterman signed a multi-million dollar deal with Everton FC to sponsor his kit.
In April 2020, Cazoo resumed deliveries and key workers.
In 2021, it revealed that the company had lost £102 million in the first six months of the year, raising questions about the company’s stability.
It further revealed that Cazoo had suffered an additional loss of £102. 7 million for the 2020 total.
In 2022, Chesterman admitted to investors that his company “could one day reach profitability. “
In June of the same year, cuts were announced after the company lost £243 million.
In January of this year, Chesterman stepped down as CEO and prepared for mass layoffs.
Cazoo isn’t the only online auto store struggling, as CarStore was recently forced to close 16 locations.
CarStore, which was previously owned by Pendragon, was purchased through the U. S. company Lithia.
In a statement, the company, which also runs Evans Halshaw and Stratstone, said the decision was made to focus on the other two industry giants.
The news left 250 workers with the hard truth that they had been laid off.
While 16 outlets will be closed, 4 CarStore sites will be retained and re-franchised.
Meanwhile, seven CarStore modules will be at Evans Halshaw Direct locations.
Lithia bosses said: “The company is going to cut around 250 jobs across the UK.
“The vast majority of the losses will come from the closure of 16 CarStore locations, adding seven warehouse-sized showrooms, which are expected to reduce the burden of promoting used models through economies of scale. “
It is understood that consumers will be contacted in relation to closures affecting them.
In the past, all three car suppliers were owned by Pendragon, which agreed to sell them to Lithia in September last year.
In a £250 million deal, Pendragon CarStore, Evans Halshaw and Stratstone.
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