MADE Acquisition: Key Details, Impact, and What Comes Next

Next's acquisition of Made.com marks a significant shift in the online furniture retail landscape. By purchasing Made.com's brand and intellectual property for £3.4 million, Next aims to leverage the established market presence of the once-promising startup. This move underscores the ongoing consolidation in the industry, driven by economic pressures and evolving consumer behaviors.

What Is MADE?

Founded in 2010, MADE specializes in stylish and unique homeware, offering a wide range of products including sofas, furniture, lighting, soft furnishings, home accessories, and garden furniture. The company differentiates itself with its distinctive designs and various promotional offers, such as discounts on multiple furniture purchases and free delivery to stores on selected items. Additionally, MADE provides fast delivery options and flexible payment plans, enhancing the overall customer experience.

Who Acquired MADE?

Next plc is a prominent player in the retail industry, specializing in clothing, footwear, and home products. The company operates both physical stores and an online shopping platform, offering a wide range of products for men, women, and children. With a significant market position in the UK and internationally, Next plc is known for its commitment to transparency and governance, as evidenced by its detailed investor information and focus on corporate responsibility.

When Was MADE Acquired?

Next acquired Made.com on November 9, 2022. This acquisition came at a time when Made.com was grappling with severe financial difficulties, including a significant decline in consumer spending, rising import costs, and supply chain issues. The timing of the acquisition reflects broader industry trends where economic pressures have forced many retailers to consolidate or face administration. Despite efforts to find a buyer, Made.com ultimately ceased taking new orders in late October, leading to its acquisition by Next.

Why Was MADE Acquired?

• Market Expansion: The acquisition of Made.com allows Next to strategically expand its market presence in the online furniture retail sector. By incorporating Made.com's brand, website, and intellectual property, Next can tap into new customer segments and geographic markets, enhancing its overall market reach.
• Technology Integration: Made.com's advanced e-commerce platform and streamlined design-to-sale process offer significant technological benefits to Next. Integrating these digital assets into Next's existing infrastructure can improve operational efficiency and enhance the online shopping experience for customers.
• Competitive Advantage: Acquiring Made.com strengthens Next's competitive position by adding a well-known furniture brand to its portfolio. This move not only broadens Next's product offerings but also leverages Made.com's established customer base, providing a competitive edge in the crowded home and DIY retail market.

Acquisition Terms

• Acquisition Price: £3.4 million ($3.8 million)
• Payment Method: The payment method was not publicly disclosed.
• Key Conditions or Agreements:
  • Next acquired Made.com's brand, website, and intellectual property.
  • The acquisition did not include staff, resulting in significant job losses.
  • Approximately 4,500 customer orders already with carriers will be delivered, while many orders still at origin in the Far East cannot be completed.
  • PwC, the appointed administrators, will handle all customer queries and the winding down of the business.

Impact on MADE

The acquisition of Made.com by Next has led to significant changes in operations and management. Made.com entered administration, with PricewaterhouseCoopers appointed as administrators. Next acquired the brand, website, and intellectual property but did not retain any staff, resulting in approximately 500 job losses. The future of the brand under Next's management remains uncertain, although Next has launched a new Made.com website and app using its Total Platform. This shift marks a substantial operational overhaul, focusing on integrating Made.com's digital assets into Next's existing infrastructure.

The effects on product offerings and services have been profound. Made.com ceased taking new orders in late October, and many customer orders remain unfulfilled, particularly those originating from the Far East. While around 4,500 orders already with carriers will be delivered, the company will not process refunds for pending orders, causing frustration among customers. Employee reactions have been marked by disappointment and regret, with many expressing concerns over job losses and the company's abrupt closure. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring smoother transitions and better stakeholder communication.