Cazoo, an online dealer of used cars, has announced that Alex Chesterman, its founder, will be stepping down as chief executive following a collapse in share prices of 97pc.
Chesterman, who founded Zoopla and LoveFilm to help homeowners find the best house prices, will continue his executive chairman position. Paul Whitehead, who is currently the chief operating officer, will take his place as his replacement.
Cazoo called the division of Mr Chesterman’s roles “customary” and stated that it would allow its founder, Mr Whitehead, to concentrate on strategy.
The company has suffered a loss of more than nine-tenths of its value since being listed on the New York Stock Exchange in 2021. It also reduced its target for UK car sales this year.
Cazoo stated that it will now aim to sell 40,000-50,000 cars in Britain this year, compared with the 65,000 it sold last. Instead, it will focus on faster sales and higher margins.
Cazoo raised $1bn for the listing in the US via a special purpose acquisitions vehicle (Spac), in 2021. valued it at $8bn (£6.4bn ). It has fallen to $233m since then, which is 97pc.
It has sold its Spanish and Italian businesses and has mostly wound down its French operations. This has put an end to a grand plan for dominating online European second-hand car sales.
Mr. Chesterman’s plans to continue his success with LoveFilm, Zoopla and Zoopla were hampered by, the fragmented and highly competitive used car market.
Through price comparison websites, customers can access accurate pricing information about their vehicles. This helps dealers to maximize margins.
Its business model, which allows you to order a used car in a matter of clicks, has been copied by its competitors. They offer test drives and the traditional showroom experience, which Chesterman wanted to eliminate, but which was still important for some car buyers.
Chesterman stated: “Our 2023 plan, with more modest top-line ambitions, ensures we continue to improve unit economics, lower our fixed costs, and conserve cash as we make continued advances towards our goal to reach profitability, without the necessity to raise additional funding over the next 18-24 month.”
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