Ebuyer to lay off more than 70 after Frasers sale: report

Electronics specialist falls into administration as business contraction, creditors and tax bill weigh down bottom line

Retail and resell business Ebuyer has made nearly 80 employees redundant following its collapse, according to media reports.

The layoff tally includes 79 staff members, while 48 have been transferred to Frasers Group, which acquired the business for £2.06m in August.

Newly released documents, seen by HullLive, detail the decline of the business as it faced tailwinds including a slowdown in the market and worsening relations with its creditors.

Ebuyer was purchased by Mark Reed and Rich Marsden (pictured) in 2022 for £26m, with the duo seeking to revive the business. However, according to reports, they were repeatedly rebuffed by investors.

In recent months, the struggling business received numerous buyout offers, some as low as £1, according to a report by specialist insolvency firm FRP.

It also owes a £1.7m tax bill to HMRC and larger sums to distributors, contributing to the move into administration.

FRP added that management had pushed to expand the firm’s product offering to improve margins.

However, the plan required funding and it was deemed unlikely that third-party investment would be forthcoming due to Ebuyer's precarious financial situation.

“The company was initially impacted by a combination of factors, including a 20 per cent year-on-year market contraction, post-Covid demand softness, broader macroeconomic headwinds, and a sector-wide tightening of creditor support throughout 2023-2024,” reports HullLive.

“Despite generating £136.5m in revenue for the year ending December 31, 2023, the company recorded a net loss of £1.7m, reflecting wider challenges across the retail and technology sectors.

"The withdrawal of credit insurance across the sector further constrained working capital flexibility, leading to increased cost of goods sold and compressed gross margins, resulting in an EBITDA (earnings before interest, taxes, depreciation and amortisation) loss of £4m in 2024.

“With approximately 90 per cent of sales dependent on distributor supply, the company's limited access to direct stock restricted its ability to secure higher margin products and scale its owned brand ranges, including Xenta and Alphasync."