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UK ONLINE dealer group Cazoo has announced it may call in administrators as it urgently seeks new capital while selling unwanted assets.

UK auto publication Automotive Management (AM) is reporting that Cazoo is planning to relaunch as an online car marketplace to rival Auto Trader.

AM said Cazoo has filed with the UK High Court notices of intention to appoint administrators for its subsidiaries Cazoo Holdings, Cazoo Ltd (which operates its marketplace business) and Cazoo Properties which owns the majority of its leaseholds.

As a result, the subsidiaries are protected from creditors’ debt enforcement until administrators are appointed or for a further 10 days.

Automotive Management said Cazoo’s notice stated that despite the notice of administration, its subsidiaries will continue to operate as normal.

“Cazoo Group warns that if certain subsidiaries go into liquidation it would consider whether the entire group should go into administration or be wound up,” the report said.

Cazoo last week warned investors it could fold if it failed to urgently raise capital. It has sold most of its used car inventory, paid off stocking loans and cut staff numbers. 

AM said Cazoo continues to negotiate the termination of leases, to try to sell customer service centres to third parties and dispose of unwanted assets.

Cazoo said it needed to raise more money to remain viable in the medium to long term.

“We have been pursuing strategic alternatives for the business or parts thereof, and while we have received interest for parts of the company’s business and assets, we have not received any offers that would, if consummated, enable the company to continue as a going concern in the medium- to long-term,” Cazoo said in a statement.

Cazoo in March started to sell its used car stock, transporters and customer care centres as it announced it will switch to a new business model as a car marketplace, competing with rivals such as Auto Trader, Motors and AA Cars.

It said it would look for a new chief executive – the business’s third in five years – as its CEO Paul Whitehead was leaving.

In 2021 one city fund manager said: “Cazoo is a bubble. Pure and simple.  Possibly one of the biggest ever. And when it pops, a lot of people are going to feel it.”

Cazoo’s founder Alex Chesterman OBE left the company in December 2023.

In June 2022, Cazoo announced it planned to cut costs by £200 million ($A380m) by the end of 2023, which would include around 750 job cuts as it aims to downscale to a more sustainable size and achieve profitable growth.

It said it would cease signing up new business to its new car subscription service, which it launched after acquiring Drover for £65 million ($A124m) in late 2020.

Its 2022 statement revealed it would cut about 15 per cent of its workforce and slow down on hiring new staff as it “manages a climate of consumer cutbacks and fears of recession”.

About 4000 of its 5000-strong workforce is based in the UK.

Cazoo

It will also limit capital expenditure, rationalise its vehicle preparation and customer support locations, and rein in its brand marketing spend in favour of performance marketing.

It aims to become self-funding in the UK, without needing further capital, and has its sights set on achieving breakeven at lower sales volume through stronger focus on gross profit per unit and working capital.

This 2022 statement from Cazoo came just days after Carzam, a purely online car retailer founded by Big Motoring World boss Peter Waddell in Cazoo’s footsteps, went into voluntary liquidation.

By Neil Dowling

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