Used car dealer Cazoo has announced the completion of the sale of its German car subscription business, Cluno, marking its exit from the European market. The financial terms of the deal with ViveLaCar and The Platform Group have not been disclosed. Cazoo's withdrawal from mainland Europe follows the sale and wind-down of other businesses and assets in the region. The company incurred significant administration expenses of £530 million in 2022, attributed to the costs of shutting down acquired businesses, compared to £219 million the previous year.

Cazoo had acquired Cluno in February 2021 as part of its expansion plans to establish a dominant presence in the European used car market. However, the company has faced challenges in recent months, resulting in significant layoffs, the closure of customer centers, and scaling back vehicle preparation operations. Cazoo has also divested its operations in Italy and Spain, closed its car subscription business in the UK, and sold its data business, Cazana.

The company's share price has declined by 43% in the past month, trading at $1.30, valuing the business at just $50 million (£40.2 million). This is a significant drop from its initial valuation of £5 billion during its listing on the New York Stock Exchange. Despite an improvement in profit per unit according to the first-quarter update, Cazoo reported a 7% decrease in the number of used cars sold and an 11% decline in revenue.

Experts have raised concerns about Cazoo's strategy, questioning the significant expenditure on growth and acquisitions that ultimately led to a retreat from the European market. With a market cap of £40 million, industry professionals speculate on the company's survival and whether someone would acquire the brand or if it can sustain itself as a UK online-only car retailer.

Cazoo merged its share capital in February to boost its share price, as it fell short of the NYSE's requirement that listed stock must have a consistent price above $1. However, the share price has again approached that limit, despite the merger. Cazoo's new CEO, Paul Whitehead, expressed confidence in the company's new business plan, highlighting that the closures would save £25 million per quarter and help mitigate cash burn. The company aims to end the year with cash reserves between £110 million and £130 million, having £215 million in the bank at the end of the first quarter.

Moving forward, Cazoo has set a target of selling between 50,000 and 60,000 cars this year, with a focus on retail customers. The company plans to adopt a more targeted approach in vehicle selection, leveraging proprietary data on desirability to drive better margins and improve its website's car offerings.

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