Laybuy companies placed into receivership, boss 'heartbroken' after ...

Buy now, pay later service Laybuy has been placed into receivership.

David Webb and Robert Campbell of Deloitte New Zealand have been appointed receivers and managers over three Laybuy companies.

“I am absolutely heartbroken at today’s decision to request the appointment of receivers to the Laybuy Group,” managing director Gary Rohloff said.

“This is a devastating time for the Laybuy team, and I will be doing everything I can to support them as we go through this process.”

Laybuy had suffered from a downturn some operators in the buy now, pay later (BNPL) sector experienced.

BNPL boomed during Covid-19 lockdowns but consolidation, regulation, a return to more normal shopping habits, the rise of online rivals such as Temu and a sluggish economy have since presented challenges.

“We had been working incredibly hard to execute a plan to achieve profitability after years of rapid growth,” Rohloff added in a statement this afternoon.

“While we have been making good progress over the last two years, the economic downturn has been longer than we expected and this has had a significant impact on the retail sector in both New Zealand and the United Kingdom,” he said.

He said reduced consumer spending, higher credit losses and more fraudulent activity had hurt the company.

“This, alongside increased financing costs, created a perfect storm that was difficult to recover from.”

Rohloff said attempts to sell the business were unsuccessful.

“This left the board with no option but to make the gut-wrenching decision to voluntarily request the appointment of Deloitte as receivers. This is a difficult time for our team and I am devastated.”

He said his priority now was to work with receivers and seek the best solution for staff, creditors, suppliers and merchants.

Deloitte this afternoon said Laybuy Group Holdings Limited, Laybuy Holdings Limited and Laybuy Australia Pty Ltd have all been placed into receivership.

“For the sake of clarity, the UK-based entities and certain other entities in the Laybuy Group are not in receivership,” Deloitte said.

The appointment was made at the request of Laybuy directors, after efforts to seek additional investment and a sale of the business and assets, Deloitte said.

“The receivers are working with the companies’ employees, merchants and other affected stakeholders to assess the financial position of the companies and ascertain the way forward.”

Deloitte said Laybuy was not accepting new transactions but customers should still make payments as normal and consumers did not have to take any other action 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,” Webb said.

On Friday, Laybuy told merchants using its service its payment offering was suspended.

The company sent out a notice on Friday, stating: “Laybuy’s services are currently suspended, including all payment options.”

It added: “We don’t currently have a resolution timeframe but will ensure you are immediately notified. Thank you for your patience.”