Furniture and lifestyle brand Made.com has announced plans to float on the London Stock Exchange.
· MADE is the leading digitally native lifestyle brand in home. MADE’s mission is to make high-end designer furniture and homeware products accessible to everyone. MADE sells its products across the United Kingdom, Germany, Switzerland, Austria, France, Belgium, Spain and the Netherlands via its e-commerce platform, which provides an inspiring and seamless customer experience, while its asset light vertically integrated model allows for scalability.
· MADE believes it provides its customers with high-quality, responsibly made, affordable products, underpinned by exclusive designs, that enable customers to curate their life at home. MADE’s fresh and ever-changing range, with nine new collections launched on average every week and around 40% of its range renewed each year, consists of over 6,000 curated furniture and homeware products.
· To create its product range, MADE partners with over 150 established and up-and-coming designers, artists and collaborators. Its customer proposition has enabled MADE to develop a large, active and loyal customer base, with approximately 1.1 million active customers in 2020 and approximately 1.2 million active customers in the last 12 months to the end of the first quarter of 2021.
· MADE’s business model is centred around a flexible asset-light supply chain, vertically integrated across all functions and processes, covering the entire product lifecycle from product development and sourcing (including concept design, development, production and ordering) through to global shipping, warehousing and home delivery. Sustainability is embedded into MADE’s operations with growing visibility and transparency given to its customers. MADE designs products with their longevity in mind and is committed to its sustainability initiatives.
· MADE was founded in 2010 and launched its first website in the United Kingdom that year. MADE has gradually expanded its product offering, starting with upholstery, then furniture and more recently homewares and lifestyle categories. In parallel to its product offering expansion, MADE commenced its international expansion by launching its French website in January 2013, followed by websites for a number of other European markets from 2013 to 2018, with Spain being the latest market that it entered in 2018.
o In the three months ended 31 March 2021 approximately 48% of gross sales were generated from customers in Continental Europe and 52% from the United Kingdom.
o For the same period, repeat orders in the United Kingdom (as MADE’s most mature market) constituted approximately 50% of MADE’s total UK customer orders.
· MADE is the most popular home and living brand for UK millennials, the most reviewed home brand on UK Trustpilot, has an “Excellent” Trustpilot rating in the United Kingdom and core Continental European markets and has more than 3.1 million followers across its social media accounts.
· The furniture and homeware market stands at an inflection point of e-commerce adoption, with significant further upside potential given the secular shift to online. The market is further bolstered by a number of consumer trends re-shaping the space: shifting demographics, increased focus on product sustainability, rise in remote working, and growing brand awareness driven by high social media engagement, among others.
o According to own estimates from Euromonitor data, the global furniture and homeware market for both online and offline is currently estimated at £504 billion, of which £151 billion is attributable to Europe. The homeware and furnishings category is well positioned for growth given rising penetration rates and high forecasted growth, making it one of the most attractive sectors with significant potential in the retail space.
o MADE is well positioned to take advantage of the structural tailwinds driving the online furniture and homeware market, including sector consolidation, increasing focus on sustainability, working from home, and millennials entering their core home formation years.
o MADE operates in a highly fragmented market wherein the top 10 companies comprise less than 20% of the total market by revenue1. The majority of the sector is comprised primarily of independent, regional specialty brick and mortar retailers, many of which will have to adapt to stay relevant as consumer demands continue to change. This provides ample opportunity for growth and market share gains, particularly for MADE’s differentiated business given its distinct competitive strengths.
· MADE has consistently shown strong topline growth, with 36% gross sales compound annual growth rate over the last five years. MADE’s gross sales, net revenue and Adjusted EBITDA (as defined below) were £109.5 million, £82.4 million and £1.8 million, respectively, for the three months ended 31 March 2021 and £315 million, £247 million and (£5.1 million), respectively, for the year ended 31 December 2020. MADE’s business is also highly cash generative, due to its attractive negative working capital profile and relatively low capital expenditure requirements.
· MADE reported impressive Q1 2021 results with accelerating gross sales growth of 63% period-on-period: supported by strong underlying metrics. The homeware division gross sales growth continues to outpace furniture growth in Q1 2021 homewares sales mix (as a percentage of total gross sales) increased by three percentage points from Q1 2020 to Q1 2021 to 28% of gross sales. Gross sales growth was supported by high growth in both the United Kingdom and Continental Europe, which saw gross sales growth of 65% and 60% respectively for Q1 2021 compared to Q1 2020.
Philippe Chainieux, CEO of MADE, said: “MADE.COM has been revolutionising the home and living sector for the last eleven years. Founded in the UK, it is now the leading digitally native lifestyle brand in a sector that is shifting steadily online. The business is powered by a technology platform that connects independent designers and makers, allowing us to develop our exclusive product offering.
“The business is fast growing and we have demonstrated the capacity of our brand and customer proposition to travel well. Around half of our sales are outside of the UK and we are aiming to be the leading home destination in Europe for the digital native.”