A furniture business is being formally would up with debts totalling £136 million including £13.8 million owed to more than 30,000 customers, some of them from Brighton and Hove.
Most customers are likely to get little or no money back, with a report by Made.com’s administrators estimating that deposits totalling £1.9 million will be repaid through credit card company charge-backs.
Credit card charge-backs are typically made when orders don’t arrive or in cases of fraud.
But that still leaves customers owed a total of almost £12 million – or more than £400 out of pocket on average – after paying deposits for items such as sofas.
The financial shortfall comes despite a move by the retail group Next which bought Made’s brand, website and customer database for £3.4 million when it went bust last month.
That’s because customers are “unsecured creditors” – as are suppliers – and other creditors are paid out first from any proceeds, including secured lenders, the Revenue and Customs and staff.
Made’s administrators have filed a report that sets out the challenges in recouping money for left over after any assets have been sold.
The sale of stock which was valued at £18.8 million was expected to bring in only about £1.8 million.
The administrators previously estimated that unsecured creditors would receive no more than 1.6p for every pound that they were owed.
And, it was reported, the collapse of Made cost the jobs of about 400 staff even though Next bought the brand of a business valued at £775 million just 18 months ago.
The online retailer blamed the failure of its business on a drop in consumer spending linked to the rising cost of living as well as higher import costs and supply chain pressures.
Made opened its first pop-up shop in Church Street, Brighton, in January 2016 – nine months after carrying out focus group research here.
