Made.com UK administration: can customers get a refund from the furniture website? Process explained

Furniture website Made.com has fallen into administration after days of speculation that it had gone bust.

It is the latest big-name brand to collapse this year, following the demises of Missguided, Studio Retail Group and McColl’s. Mike Ashley stepped in to save the first two, while supermarket Morrisons snapped up McColl’s.

It comes as firms struggle to cope with the UK’s worsening economic outlook, the cost of living crisis, record price inflation and an ongoing supply chain crisis. These issues have combined to drive up costs for businesses and reduce their profitability.

Made.com’s collapse has come despite an offer to rescue it from its co-founder and former boss Ning Li. It marks a dramatic decline in fortune for the company, which was valued at £775 million last year following huge success during the Covid-19 lockdowns.

So what went wrong for the firm - and how can you get a refund if you’re a customer? Here’s everything you need to know.

What is administration?

Put simply, ‘going into administration’ means a company cannot pay back its lenders and therefore has to call in administrators. Administrators, also known as insolvency practitioners, take over the running of the firm from its executives.

These people either work towards saving the business, or carving it up so that creditors (everyone from investors to customers) are paid at least some of the money they’re owed. It all depends on whether the company is viable as it is, or whether only some bits of it can survive.

If the business can continue, control is handed back to the directors and things resume as normal. But, if it can’t go on, it might be put up for sale or liquidated. Liquidation is when everything a company owns, including intellectual property (e.g. branding) and stock, is sold off in order to raise money to pay back people the business owes money to.

Why is Made.com in administration?

Made has suggested a combination of price inflation, low demand and unreliable supply chains have been responsible for its collapse. Its CEO Nicola Thompson said the firm had “fought tooth and nail” to keep itself alive.

Inflation has become a major issue for firms because soaring energy prices have seen the cost of production rocket. Meanwhile, the cost of living crisis has cut demand from consumers and unreliable supply chains have left businesses struggling to fulfil orders in time.

Its administrators PWC appear to be liquidating the business. They have already announced that all 573 staff will lose their jobs at the firm.

Meanwhile, the company’s website says it is no longer taking orders, while its customer service chatbot has been disabled. A statement on the store’s website says it is “deeply saddened to announce [its] closure”.

Fashion and homeware chain Next has already said it is buying the Made brand, website and intellectual property for £3.4 million. It has not opted to purchase the firm’s remaining stock.

Made would work with independent designers and manufacturers to bring their goods to a mass market. At the time of its collapse, it was processing around 12,000 orders in the UK. Around 4,500 orders across Made’s UK and European business are on their way out to be delivered to customers.

Can you get a refund from Made.com?

You cannot get a refund directly from Made.com or make a return. However, with the administrators liquidating the business, you could get some money back as part of the process.

There is a pecking order for who receives the money they are owed first. Generally it follows this order:

• Secured creditors (e.g. banks who have provided mortgages or loans)
• Preferential creditors (HMRC for unpaid taxes and employees who are owed wages, holiday pay and pension contributions)
• Unsecured creditors (suppliers and customers)
• Shareholders or members

As you can see, customers are not the immediate priority, so you may not be guaranteed a full refund - but it is worth attempting to claim one. If you spent more than £100 with Made.com and used a credit card, you might stand a better chance of getting your money back if you try to reclaim it via your bank.