Cazoo: Online Car Giant Retailer Goes Into Administration
Cazoo came to be in 2018 when it was founded by Alex Chesterman who was the founder and brains behind online property estate agent, Zoopla. It quickly became somewhat of a household name, with many people able to recall and recognise their TV adverts and catch phrase ("Cazoo Yeah You Can!" for those of you less familiar). Cazoo boasted a vast network of trusted dealers who were able to offer buyers the best price on used cars. Further, individuals looking to sell their cars online for a competitive price after receiving an online valuation. At the time of writing, Cazoo had a nationwide stock of over 7,400 cars. The model, which was unique to the likes of We Buy Any Car, was proved to be successful with over 185,000 monthly valuations carried out by potential customers, according to their website. Once valued at over £5bn, the company was a huge success. An industry source told Sky News that, at one point, Cazoo's inventory sat at over 15,000 cars and it was the only online vehicle marketplace when customers could both buy and sell their cars under one brand.
Image: Sky News
A large part of Cazoo's marketing strategy saw them invest millions of pounds into large sponsorships in order to achieve a greater slice of the market share. Things such as sponsorship of football teams and other big events, such as snooker and darts, helped Cazoo grow into the widely recognised brand that it is.
Alex Chesterman left the company several months ago following balance sheet restructuring that resulted in millions of debts worth of debt converted into equity. Further balance sheet restructuring and shifts in operations has resulted in the company going into administration. Administrators have already started to sell off much of company's assets, including its vehicle fleet. Sources have reported that this has generated higher than expected amounts of money due to the national shortage of used cars which has seen the prices of second hand cars increase over the last 12 months.
Despite its huge valuation and booming success over the course of the early pandemic days, in 2022 Cazoo saw its losses rise to £704m in comparison to £544m in 2021. Likewise, in 2021 Cazoo employed approximately 4,500 people but today that number sits a lot lower with around 1,000 staff left. At the time of writing, as the company formally enters into administration, a further 700 people have lost their jobs.
Whilst rumours suggest that some potential buyers of the company include BMW, Motorpoint and Car Gurus, it is clear that uncertain times have landed for the company and many people will be experiencing financial hardship as a result of job losses.
