Gary Rohloff, founder and CEO of buy now, pay later (BNPL) firm Laybuy said he was “absolutely heartbroken” at the decision to call in administrators.
In a statement, he wrote: “We had been working incredibly hard to execute a plan to achieve profitability after years of rapid growth. 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 the United Kingdom and in New Zealand.
“As a result, we have seen reduced consumer spending, higher credit losses, and increased fraudulent activity. This, alongside increased financing costs, created a perfect storm that was difficult to recover from.”
Rohloff added that the team “tried everything” it could to work through the issues, including negotiations to sell the business. Unfortunately, these negotiations “fell over at the last hurdle”.
“This left the board with no option but to make the gut-wrenching decision to voluntarily request the appointment of FTI Consulting LLP (“FTI”) as Joint Administrators. This is a difficult time for our team and I am devastated,” the CEO said.
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He added that his “absolute priority” now is to work with the administrators to ensure the best possible outcome for staff, creditors, suppliers and merchants.
Payment services suspended
Laybuy offers a ‘buy now, pay later’ service alternative to credit cards, allowing users to spread payments over six-weekly instalments.
It has operations across New Zealand, Australia, and the UK, and tops 10,500 merchants and approximately 500,000 users globally. In the UK, there are an estimated 300,000 active users, with 2,600 merchants signed up.
Last week Laybuy suspended payment services across all regions.
In an update for New Zealand and Australian customers, it confirmed it had appointed receivers and managers, but that its UK-based entities were not in receivership.
In the ‘help’ section of its website, it explained that this move meant customers weren’t able to create new orders online or in-store, though they could make manual repayments and default payment cards were still charged when an instalment is due. Missing payments will still incur late fees while payments more than 42 days in arrears may be referred to a debt collection agency, it added.
At the time, YourMoney.com contacted Laybuy for more information for UK customers and was told a different process exists in the UK to reflect legal requirements, with further details expected imminently.
And now, with the UK arm of Laybuy in administration, customers should also keep up repayments as they’re bound by the firm’s debt collection terms and conditions.
A dedicated website has been set up for updates which can be found here: www.fticonsulting.com/uk/creditors-portal/laybuy-uk.
Laybuy added that for anyone waiting on a delivery, it will be sent as normal. Meanwhile, for those requiring a refund or exchange, they should contact the Laybuy customer services team as a limited number of the team are still contactable during this time.
Sam Ballinger, one of the joint administrators, said: “The joint administrators are currently assessing the options available to the companies and supporting the employees, merchants and other affected stakeholders through this difficult period.
“Laybuy is not currently accepting new transactions, however, customers should continue to make payments as normal.”
