The online furniture retailer Made is giving share options worth more than £10,000 to all its staff after the company benefited from new shopping habits forged during the lockdown.
Coronavirus restrictions, coupled with the shift to working from home, proved the catalyst for a boom in home furnishings sales, with consumer cash usually spent on foreign holidays and socialising funnelled instead into interior makeovers, sofas and desks.
Sales had been “extremely strong” in 2020, said Philippe Chainieux, Made’s chief executive, and the decision to give shares to its 650 staff was an acknowledgement that it would not have been possible without them.
Chainieux said: “The business has faced a lot of uncertainties this year but it has been a positive one for us, and that’s really thanks to the contribution of staff. The people on the frontline in our stores, factories and warehouses. Without them we would not have been in a position to continue trading during the lockdowns.”
All Made staff, barring senior management, are receiving the same number of share options, which vest in equal tranches over the next three years. They are estimated to be worth the equivalent of six months’ salary.
Employees can sell the shares at the same time as other investors in the private equity-backed company. Chainieux said the three-year scheme indicated a possible future financial transaction, for example a sale. The company raised £40m in 2018 from its backers, which include the French investment firm Partech.
The 10-year-old company, which was co-founded by Ning Li and the serial entrepreneur Brent Hoberman, has grown rapidly in a specialist area of the market that many analysts thought would struggle to compete with stores, where expensive purchases such as sofas and beds are road-tested for comfort.
With its designer-looking sofas and lamps pitched at high street customers, Made has traditionally been favoured by young professionals. However, that changed during the lockdown as orders came in from suburban households as well as consumers in the provinces. The retailer now boasts 1 million customers on its books. This year’s Black Friday sale was the biggest day in its history, with UK sales doubling year on year.
“That’s a direct impact from the lockdown … we are seeing new customers buying from us,” said Chainieux. “There is a growing part of the consumer base that has the confidence to buy without touching and feeling products.”
Shoppers are also spending more of their disposable income on items for their homes, with the market leader Ikea reporting unprecedented demand for its home furnishings. The impact of government Covid pandemic restrictions is also translating into sales.
The order to work from home pushed desk sales at Made up 200%, while the company sold 10,000 sofa beds in one week – a 170% year-on-year increase – after the government said three households could form “Christmas bubbles”.
As in many areas of spending there has been a huge tilt towards the web this year. Nearly 40% of furniture and flooring sales will be made online this year, compared with 26% in 2019, according to analysts at Retail Economics. The question now is whether shoppers will return to high streets and shopping centres in big numbers once the pandemic is over.
“We have seen a rapid acceleration of the shift to online, with changes that might have taken four or five years happening in a matter of months,” said Chainieux. “So it has been a very brutal movement. My conviction is that a big part of what we’ve seen this year will stay for the long term. The growth of our [website] traffic has for the last month, depending on the country, been between 60% and 100%.”