U.K.-based online used car dealer Cazoo has finally completed its exit from mainland Europe after selling Cluno, its Germany-based car subscription business, to ViveLaCar and The Platform Group for an undisclosed sum.
“This transaction, together with previously announced sales and wind-down of other businesses and assets in Europe, concludes the withdrawal of Cazoo from mainland Europe,” the company said in a statement to the NYSE.
Cazoo acquired Cluno in February 2021 as part of a wider spending spree after it had secured hundreds of millions of dollars of investment, seeking to become a leading European used car business. It did not disclose how much it paid for the company.
In its 2022 financial results, Cazoo’s administration expenses, which included the cost of shutting down businesses it had previously acquired, increased from £219 million in 2021 to £530 million ($663 million U.S.).
After its 2020-21 spending spree, the company unveiled a realignment plan in June 2022, aiming to save $250 million by the end of 2023. Following a strategic review, the company decided to pull out of mainland Europe in September, which led to the closure of its operations in France, Italy, Spain and Germany.
It has also sold parts of its U.K. operations, including its car subscription business, made thousands of staff redundant and closed 15 of its 22 customer centers in the U.K.
Founder Alex Chesterman has stepped back from a day-to-day leadership role and passed the CEO role onto Paul Whitehead, who is being assisted by former CarShop CEO Jonathan Dunkley.
Cazoo floated on the New York Stock Exchange on August 27, 2021, through a special-purpose acquisition company (SPAC) that valued it at $5.0 billion. Its share value has fallen by 40% in the last month, and its shares now trades at around $1.30, valuing the business at just $50 million.
On a brighter note, its Q1 2023 results showed that its gross profit per unit improved to $1,220 per vehicle and it was progressing towards its target of becoming a profitable business, even if this target has now been pushed back from the end of 2023 to H2 2024.
The company said that the closure of many parts of its business would save it £25 million per quarter and that it expects to end FY 2023 with between £110 million and £130 million in the bank. It expects to sell between 50,000 and 60,000 vehicles in the U.K. during this period.