Second-hand smartphone vendor musicMagpie is trying to find a purchaser simply two years after going public following the collapse of its share value and faltering US development.
The Stockport-based firm, based in 2007 by Steve Oliver and Walter Gleeson, has referred to as in consultants from Deloitte to think about its choices, together with a personal sale.
Valued at over £200m in an preliminary public providing simply over two years in the past, musicMagpie’s share value has plunged and the enterprise is now price simply £20m. Shares had been buying and selling at round 18p on Friday.
Gross sales have been declining for the reason that pandemic, whereas cracking the US with its Decluttr model has proved difficult. Metropolis sources stated the corporate might search a sale with a valuation within the area of £40m.
Revenues fell to £61.9m within the first half of 2023, down 14pc from £71.3m a yr earlier. Gross sales in musicMagpie’s previous enterprise shopping for and promoting undesirable DVDs additionally dropped extra sharply than anticipated, down 17.4pc, as curiosity declined with the rise of Netflix and different streaming apps. Gross sales additionally suffered earlier this yr from strikes at Royal Mail, which disrupted deliveries.
Gross sales at its US arm fell from £18.4m to £14.7m within the first half of 2023. It reported a £2.8m loss over the interval and is at the moment sitting on £13.6m in web debt.
Describing its enterprise as “re-commerce”, musicMagpie started life shopping for undesirable CDs from shoppers earlier than increasing into books, DVDs, video video games and previous devices.
It additionally recycles unusable cellphones and refurbishes devices for resale. It sells the refurbished tech on its web site in addition to on Amazon and Walmart within the US. The corporate has been increasing its smartphone renting enterprise, the place clients pay a month-to-month charge to lease a telephone.
Launched in 2007 out of a storage in Stockport, the corporate has grown to round 700 employees and £145.3m in revenues in 2022. It claims to have upcycled over 400,000 shopper tech devices.
Spokesmen for musicMagpie and Deloitte declined to remark.
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