Cazoo staff being consulted over plans to shut Southampton site

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STAFF at the online car seller Cazoo are being consulted over plans to close its Southampton site.

The company is considering shutting its Millbrook customer center barely two years after investing £1million in the premises.

READ MORE: Online car seller Cazoo invests £1m and creates 15 jobs

The move comes after the business – which has offices at Hedge End – told investors it was looking to sell fewer cars this year but focus on profit margins.

A spokesperson told the Daily Echo: “We have not made any decisions at this point. However we have announced that we will be starting a consultation process with the team at Millbrook.”

The trade journal CarDealer has reported that Cazoo is consulting staff on the closure of a “large number” of its premises.

Announcing its financial results for the final quarter of 2022 earlier this week, Cazoo Group revealed it sold around 65,000 cars that year. It said its plan for 2023 was to sell fewer cars but focus on the profit margin for each unit sold.

“To enable these improvements, we are resetting our 2023 top line ambitions to 40,000-50,000 UK retail units, allowing us to focus on higher margin and faster moving inventory and to rationalize our operational footprint,” it said.

“Following this reset, we expect retail unit sales to return to growth in FY (fiscal year) 2023 and beyond. In line with the lower unit expectations for 2023 and the current economic climate, we will be making our operational and logistics networks more efficient through the closure of certain of our vehicle preparation center and customer center facilities and making further headcount reductions.”

Cazoo said the plan was “in the process of being finalised”.

READ MORE: Southampton-based Cazoo is cutting jobs

Chief executive and founder Alex Chesterman said: “I am pleased with our progress in Q4 despite the challenging economic backdrop. We had another strong quarter of UK retail unit sales, up over 100 per hundred year on year, and we have now sold well over 100,000 cars entirely online in the UK in just three years since our launch.

“We remain, however, extremely mindful of the current economic environment and believe the right course of action for 2023 is to focus on further improving our unit economics, reducing our fixed cost base and maximizing our cash runway.

“During 2022 we have proven our ability to buy and sell cars at scale. Our new 2023 plan, which includes more modest top line ambitions, ensures that we continue to improve our unit economics, reduces our fixed costs and conserves cash as we make continued progress towards our goal of reaching profitability, without the need to raise further funding over the next 18-24 months.”

Cazoo opened its center at Second Avenue, Millbrook Trading Estate, in late 2020 after buying Imperial Cars, which previously owned the site. It spent more than £1m on the customer center there.

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