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Retrenchment and Cash Flow Management | Struggles with the Economic Downturn

Jim Riley

23rd September 2022

It's terrible news for shareholders who look like they'll lose their investment, but the challenges faced by online furniture retailer provide a superb case study for business students.

You can read about the issues faced by here in The Guardian.

The sharp downturn in consumer confidence in the UK is hitting hard as households cut back on demand for high-ticket items such as sofas, beds, chairs and tables.

In short, this recently floated public company which has issued several profits warnings is:

  • Making a third of its staff redundant
  • Stopping recruitment of new staff
  • Looking to refinance its debts
  • Exploring whether to find a strategic investor or sell itself to another business
  • Limiting purchases of inventory to conserve cash
  • Outsourcing customer service
  • Closing its operations in China
  • Reducing warehouse capacity to lower fixed costs

Anything else management have missed out?

Jim Riley

Jim co-founded tutor2u alongside his twin brother Geoff! Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs.

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