Soccer: OM’s new sponsor and LOSC in big trouble
Marseille and Lille will begin the Ligue 1 Championship this weekend with some ambition but additionally a contact of fear. Cazoo, their new important sponsor, is in the grip of significant difficulties, which led it on Tuesday to contemplate withdrawing from some European markets, not ruling out France being affected.
Founded in 2018, the British firm sells used vehicles on-line after having beforehand refurbished them. With this market set for very robust development, Cazoo has received over buyers, particularly with its March 2021 itemizing on the New York Stock Exchange, which allowed it to boost $1.6 billion.
Rain of contracts…
These funds had been used to finance growth in the home market, but additionally to launch in Germany and France final 12 months, and in Spain and Italy in current weeks.
To develop its profile, Cazoo depends closely on sports activities sponsorship. On the opposite aspect of the Channel, the younger scion is, amongst different issues, the primary sponsor of the Welsh rugby group and Aston Villa and Everton soccer golf equipment (till final season).
On the continent, it centered on the spherical ball, however by multiplying the signing of contracts. For the upcoming season, Cazoo would be the important shirt sponsor of Marseille and Lille in France, but additionally Valencia and Real Sociedad in Spain, Bologna in Italy and Freiburg in Germany.
…which might finish
However, this large advertising offensive dangers coming to an finish. First-half accounts printed on Tuesday confirmed that development in turnover (+153%) got here at a excessive value, with losses for the six months rising from £100m to £243m (€290m). 12 months.
Despite elevating funds of round 630 million euros final February, money reserves are dwindling quick. And with the slowdown in the European financial system and rising rates of interest, buyers have change into cautious and are not able to help the pursuit of development at any price. As a outcome, the inventory value on Wall Street collapsed in one 12 months from $10 to $1.
The adaptation measures taken by Cazoo are a trigger for concern for mainland golf equipment. In early June, its founder Alex Chesterman warned that money preservation was changing into the corporate’s “precedence forward of development,” backing up the announcement with a plan for 750 layoffs.
“Reduce your use of money”
Last Tuesday, it went even additional, asserting a “complete strategic evaluation of operations in continental Europe to proceed to scale back money consumption”. Financial analysts’ presentation now focuses on the UK market’s capability to ship.
The finish of exercise in the opposite not too long ago opened international locations is clearly on the agenda. Will France be affected? Asked by “Les Echos”, a spokesperson confirmed that “it’s too early to take a position. The evaluation course of ought to run its course, any choices about adjustments to the best way we work can be made afterwards. »
If Cazoo decides to withdraw from the French market, the looks of the OM and LOSC jersey will not be of curiosity to him. It will then be essential to scrutinize the margins left by the contracts to place an finish to this. And for the golf equipment – search for a new sponsor at the very least for the following season. According to the specialised press, Uber Eats, the earlier important sponsor of OM, paid round 5 million euros per season.