CEO Alex Chesterman said Cazoo will now focus on its home market of the UK and expects to break even by the end of 2023.
UK-based online car retailer Cazoo is winding down its operations in continental Europe in a bid to focus on its business at home and save cash.
Following a strategic review of its European business, the company announced yesterday (8 September) that it intends to “commence an orderly wind down” of its operations in Germany and Spain. It is also in consultation with employee representatives in France and Italy.
According to Cazoo, which has been running at a loss, the withdrawal from continental Europe is expected to provide cash savings of more than £100m and help the company break even by the end of 2023. The EU business accounts for less than 10pc of Cazoo’s revenue and retail units.
“The plan to withdraw from the EU is based on the material further investment that would be required for Cazoo to continue to scale its operations in the EU and the conflict this has with the company’s priorities of cash conservation and achieving profitability without the need for additional capital,” the company wrote in a press release.
The move will lead to the loss of 750 jobs in the EU, according to the Financial Times, leaving it with just 3,000 remaining staff in the UK. The publication also reported that Cazoo is trying to end its sponsorship of multiple football clubs across Spain, Italy, France and Germany.
Cazoo believes it has much to gain on its home turf. Figures cited by the company indicate that the used car market in the UK is worth more than £100bn, with around 8m transactions annually.
Cazoo’s growth in the UK has also been strong. Retail unit sales were up 100pc year-on-year in July and August despite challenging macroeconomic conditions, the company said. It now aims to capture a 5pc market share in the UK, where it has sold more than 90,000 vehicles since its launch.
“The strong customer demand we are seeing in the core UK business gives us high confidence in the future opportunity,” said Alex Chesterman, CEO and founder of Cazoo, who previously founded house-hunting hub Zoopla.
“I would like to thank all our colleagues in the EU who are impacted by this decision, and we will of course look to support them in every way possible.”
Founded in London in 2018, Cazoo listed on the New York Stock Exchange last March by merging with a special purpose acquisition company, avoiding the traditional initial public offering requirements. At the time, it was valued at $7bn.
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