Cazoo puts New York listing in doubt as it announces major changes
Cazoo has announced a major change to its business model, plans to cut jobs and the departure of its chief executive.
The London-headquartered car retailer added that it would remain listed on the New York Stock Exchange “until at least March 20” but that it has no obligation to continue to be so after that date.
In a statement, Cazoo said it intends to transition to a marketplace business model, exit its fulfilment operations and reduce its headcount to focus on its e-commerce technology platform, proprietary data, brand, and digital marketing and commercial functions.
A Cazoo statement said: “The members of the Cazoo board have reviewed the strategic options for the company and believe that a pivot to a pure-play marketplace business model is the best direction for Cazoo and all its stakeholders.
“This will leverage our key advantages: our brand, which is recognisable and trusted nationwide, and our technology platform, which provides a market leading customer experience, and which will build on the demand from customers and UK dealers to transact online.
“The adoption of a marketplace model leverages Cazoo’s market-leading e-commerce platform and the more than £100m investment in the Cazoo brand.”
It added: “The board believes Cazoo will bring fresh opportunities for dealers in the highly fragmented used car market, providing Britain’s car dealers with an online platform to offer their vehicles to the one million consumers on average who visit Cazoo’s website every month.
“Cazoo will support interactions between consumers and car dealers across a variety of business models, including enabling them to use the Cazoo platform to complete their transactions fully online.”
The firm has also announced that Paul Whitehead will step down as chief executive at the end of the month.
He will remain with the business until at least the middle of May as a strategic advisor.
He said: “Transitioning Cazoo to a pure-play automotive marketplace business model leverages our key advantages: the nationally recognised and trusted Cazoo brand and the Cazoo e-commerce technology platform.
“We have built a data-driven business for buying and selling cars and having sold close to 160,000 cars we have demonstrated that there is robust demand for online transactions in the automotive market.
“Our transition means we can now offer the UK’s 13,000 car dealers the chance to put their forecourt stock in front of the one million potential customers on average who visit the Cazoo website every month.
“The UK used car market represents a significant opportunity for Cazoo, with approximately seven million transactions annually, worth an estimated £100bn.
“We look forward to completing this transition and starting an exciting new chapter for Cazoo, building upon our investment in both the Cazoo brand and in our e-commerce technology platform.”
Chairman Tim Isaacs added: “I would like to thank Paul for his immense contribution to Cazoo over five years and where more recently he has guided the business through the restructuring of the group’s debt and successfully focusing on the UK market.
“I am very pleased Paul has agreed to stay on as a strategic adviser, as his knowledge and experience of digital marketplace businesses will be invaluable.”
Cazoo added that it has no obligation to remain listed or registered with the Securities and Exchange Commission (“SEC”) after March 20.
It said the board has been “evaluating the company’s liquidity and cost structure, including the costs of being a publicly reporting company, and whether the benefits of being a publicly reporting and listed company outweigh the costs.”
The business said: “As part of its efforts to conserve cash, the company has notified the parties to its registration rights agreement that the company may delist from the NYSE and deregister its securities in accordance with applicable SEC regulations.”