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Stumbling main sponsor
: The Cazoo logo has been on SC Freiburg's jerseys since this season
Photo: RONALD WITTEK / EPA
The online used car dealer Cazoo has been in Germany for just nine months.
After selling tens of thousands of cars in its home market of Great Britain, the company headed by CEO Alex Chesterman also made a fuss in Germany, claiming to be the "Amazon for used cars".
In order to become better known, Chesterman chose sports sponsorship, probably the most expensive way of all. In the new season, the Cazoo logo will be seen on the jerseys of Bundesliga soccer team SC Freiburg and German basketball champion Alba Berlin.
Chesterman willingly pays millions for this.
But the break could be over much faster than expected.
Cazoo presented its half-year figures on Tuesday.
An explosive event, as the company, which raised around two billion dollars in just a few years, fired around 15 percent of the workforce in June.
Due to the bleak situation in the global economy, profitability instead of growth was suddenly on the agenda.
But Cazoo is a long way from healthy business.
In the first half of 2022, the British sold 43,668 used cars, more than twice as much as a year ago (+113%).
But the loss rose even more extreme from 102 million to 243 million pounds.
A lot is now in question at Cazoo – for example, how long the company will continue to be active in the German, French, Spanish and Italian markets.
CEO Chesterman said a "strategic review of our business in mainland Europe" was underway.
Insiders reported to manager magazin on Tuesday that the top management and the country managers would carry out the audit themselves, and that external consultants had not been hired for it.
In September, Cazoo wants to inform the employees about the results.
A Cazoo spokesman, when asked if the review could mean a withdrawal from the markets, said it was too early to speculate on the possible outcome of the review.
"We must await the process before making any decisions about changes to the way we work."
According to insiders, the company told employees in the affected markets that they should continue to do business as usual until further notice.
Employees fear further layoffs, Nasdaq threatens to delist
Internally, such announcements do not ensure calm.
"In principle, they have announced that a second major wave of layoffs is coming," fears one employee.
Cazoo not only laid off around 750 employees in June, the company also stopped the car subscription business.
Insiders reported to manager magazin that there was a lack of management know-how on the individual markets.
The top management wanted to implement the blueprint that Cazoo had drawn up for Great Britain in other countries without any significant adjustments.
Things aren't going well at Cazoo elsewhere either: On July 15, the company received a tip from New York's Nasdaq that they had violated the rules of the stock exchange.
The used-car dealer's stock had previously been worth less than a dollar for more than 30 days straight.
A delisting is imminent.
According to those familiar with the company, Chesterman and Co. are now preparing measures to support the course.
A merger of shares may also be conceivable, but Cazoo would need the approval of its shareholders for this.
CFO Stephen Morana should take care of that.
But he is about to jump and will leave Cazoo in the fall.
His successor will be Paul Woolf, who is moving from the semiconductor company Graphcore to the online used car dealer.
Cazoo says it still has £400m in cash, the company said on Tuesday.
No further cash injections are to be expected for the time being.
After all, the stock market had apparently expected worse half-year figures, at times the Cazoo price had skyrocketed from well under one dollar to up to 1.77 dollars on Tuesday.
As the day progressed, however, the stock cooled off again and closed at $1.05.
Cazoo is currently worth a good $800 million on the stock exchange - less than a year ago it was $8 billion.