Consumer shift online propels Made’s maiden interims but profit remains elusive, says GlobalData

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Following today’s release of Made’s figures for the six months ending 30 June 2021; Matt Walton, senior retail analyst at GlobalData, a leading data and analytics company, offers his view: “On a topline level, Made has had a successful first six months of 2021, with revenue reaching £170.8m as shoppers remained more confident about buying furniture online. This uplift has been driven by a 34% increase in active customers, with 1.23m customers buying from the pureplay in the past twelve months, and a 15% increase in the average order value. As in 2020, shoppers traded up when buying new furniture to start the year by transferring money previously earmarked for holidays over to home purchases. This benefitted Made which was able to leverage its more design-led offer.

“Although the pandemic and closure of non-essential retail undoubtedly supported Made’s growth over the period, UK sales in Q2 (when stores reopened) were up 86.7% to £46.5m, and its total order book increased by £18.5m between April and June to £67m. Made also significantly outperformed Wayfair in Q2 which saw its international sales (UK, Germany and Canada) grow by 3.3% when converted into pounds sterling. Made.com has been able to dial back its marketing spend as a proportion of revenue faster than Wayfair, with Made’s proportion falling 6.6 ppts compared to 0.7 ppts at Wayfair, though it should be noted Made’s ratio of 17.8% is much higher than Wayfair’s 9.8%.

“:Profitability remains the challenge for Made, however, with its gross margin falling by 306bps on 2020 as it was impacted by exchange-rate fluctuations and higher freight costs. The retailer has announced that it aims to pass on some of these costs to customers during the second half of the year. This may be more difficult now that leisure spend and sectors such as clothing start to recover, as consumers will spend elsewhere. It continues to record an operating loss of £3.6m before exceptionals despite its excellent top-line performance. 

“Made is continuing to develop its offer through improving website functionality, nearly doubling UK warehouse space in early August, and expanding its Antwerp warehouse to support European operations. Made is also focusing more on homewares and is currently beta testing a curated marketplace for homewares. This is a sensible move to encourage more frequent traffic and improve its repeat order mix, which only increased by 1.4 ppts on H1 2020 and remained flat in Europe. Developing this level of loyalty among its customers will be crucial for Made going into 2022, when it will be going up against exceptional comparatives and increased holiday spend will put greater pressure on home sectors.”