Cazoo the online car dealer, once valued at $8.5bn (£6.3bn), is now in administration and 200 jobs are at risk.
Teneo has appointed administrators to its business. The company was founded by Alex Chesterman. Chesterman is a serial entrepreneur, who launched Zoopla, a property website, and LoveFilm, whose predecessor Netflix.
Teneo has begun the search for a buyer of Cazoo’s remaining assets including its online market.
Matt Mawhinney said, “Following the appointment of Teneo, we are continuing to progress discussions on the marketplace business as well as remaining customer collection centres.”
The marketplace model has performed well, with a strong dealer signup. We are now in a position to sell the business within the next few weeks, thanks to the appointment of an administration.
It is only two years since the UK-based company, which sells used cars online, listed on the New York Stock Exchange. It invested a large sum to sponsor football clubs such as Aston Villa and Everton as well as horseracing, darts and snooker.
The firm has sold more than 160,000 cars since it was launched in 2018. However, inflation-driven pressures on consumer spending have put additional pressure on its finances. This forced it to abandon the EU business. It will also result in over 700 job losses and a loss of £700m by 2022.
Chesterman, who had been the chief executive of the company, stepped down in early 2023 to become its chair. He then resigned from the firm at the end of December.
Cazoo announced a further restructuring in March of this year. This included the sale of an auto repair centre in Bedfordshire, and customer collection centers in Birmingham and Bristol. The company will now focus on its online platform for buy-and sell. This move led to the loss of 720 more jobs.
The company’s bosses said that while they had been able to pay back loans and reduce the size of the business, the firm still lacked the capital it needed to survive in the long-term. In a US filing, the board stated that “it was in the best interest of the company and all its stakeholders to begin the winding-up of the business”.
Cazoo’s 200 remaining employees are at risk. 124 of them work in the marketplace division, based in London. 25 others work in the customer collection centres, based in Manchester and Northampton. The jobs of the remaining 200 employees will depend on whether administrators are able to find a buyer and if new owners would be willing to hire them.
Teneo will continue to employ 59 more employees, most of whom are from its head office in London and Southampton and the customer service centers there. They will help Teneo close down the company until they no longer need them.
Cazoo plans to hold a special meeting of shareholders on the 6th June to approve its winding up.
Chesterman declined comment.
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