Pandemic punts Bubble bursts for investors in online retailers that floated during lockdown

From £658,989 owed to Thurrock council, to an art shop in east London left £33,804 out of pocket, to 12,000 people whose furniture never arrived, the details of the creditors who collectively lost almost £187m from the demise of the furniture website Made.com are a snapshot of pain caused by the bursting of the online retail bubble.

- Sarah Butler

Made was among a flurry of stock market listings that raised billions of pounds for founders and private equity backers on the belief that the scale of the Covid-19 switch to buying online would be permanent.

Between September 2020 and June 2021, digital specialists including Deliveroo and Victorian Plumbing floated on the London market, raising almost £2bn for investors and a further £ibn to pump into their companies, despite many of them making a loss.

"People bought into the fact that Covid had caused a permanent shift in the way people were shopping and excitement built up so that the valuations were absolutely crazy," said one retail boss.

Less than two years on those companies have flopped. As shops reopened along came the cost of living crisis, forcing shoppers to cut spending. Analysts at the consultancy GlobalData predict that the 26% peak in online sales in lockdown will not be achieved again for more than four years.

Floated at a valuation of £775m in June last year, Made raised almost £98m for selling shareholders and handed £10.2m in fees to its advisers. This month the group dived into administration with the loss of more than 300 jobs. Made admitted on entering administration that it "could not pivot fast enough" to deal with changing consumer demand, inflation and a more unreliable supply chain.

Among the other pandemic punts offered on the London Stock Exchange, the online makeup retailer THG, which at £5.4bn was one of the biggest London tech floats, has held takeover talks after slumping to about £814m.