Receivers have been called in by Laybuy, the popular buy-now-pay-later platform, which has put an end to the long profitability challenge that has plagued the business.
Enabling customers to spread the cost of their purchases over a number of weeks without interest, Laybuy is one of many buy-now-pay-later providers in the New Zealand market. Initially, the Laybuy had gained momentum before the Covid-19 pandemic, as too did other providers such as Afterpay.
Significant valuations were initially recorded for the companies due to expected rapid growth by investors. Laybuy has never reported a profit despite best efforts from company executives to remain confident.
Challenges also became apparent due to the rise of rival companies such as Temu, consolidation, regulation, and a slowing economy.
Laybuy Managing Director, Gary Rohloff said the decision to request the appointment of Receivers was gut-wrenching.
“We were working hard to execute a plan to profitability, but this was impacted by a sharp deterioration in the retail environment. A deal to sell the business fell through at the last minute and this left the Board with no option but to appoint Receivers.”
David Webb and Robert Campbell of Deloitte New Zealand have been appointed receivers and managers of the closure.
“While Laybuy is not currently accepting new transactions, customers should continue to make payments as normal, and no action is required to be made by consumers at this stage. The Receivers are working with the Directors to explore options as to whether a sale of the business can be achieved so that Laybuy can recommence enabling new transactions,” said Webb.
Deloitte has also advised customers that payments can be made as usual, and there is no need to take any other action at this stage. However, Laybuy informed merchants last Friday that the payment offering was suspended.
Laybuy has operations in New Zealand, Australia, and the UK and currently services over 10,500 merchants and approximately 500,000 users globally. For the sake of clarity, the UK-based entities and certain other entities in the Laybuy Group are not in receivership.
