9:30 am, July 8, 2024
Former Imperial Cars director Neil Smith says he and other experts were not listened to during their time at failed used car dealer Cazoo.
Smith had a brief stint as retail operations director at the online disruptor, after it acquired Imperial in late 2020.
However, he quit the company within months of the deal being completed and has now lifted the lid on what went on behind the scenes.
Appearing on the latest episode of the Car Dealer Podcast, Smith revealed that the company ‘had its own agenda’ and did not listen to experienced industry figures, who had joined as part of the takeover of Imperial.
He also told hosts Jon Reay and James Baggott that bosses ‘did not give any consideration to profit’ during the first 18 months of trading.
The comments come after Cazoo was officially wound up last week, with documents revealing the company owed an eye-watering £190m in unsecured debt.
Appearing on the podcast, recorded last Friday (Jul 5), Smith said: ‘I think most of the industry know what they [Cazoo] did wrong. What they didn’t look at was what it takes to prepare, market and sell a car.
‘Because they had such a war chest from investment, they were able to start and run the business in the first 12 to 18 months, not really giving any consideration to profit.
‘That was the whole point of the tech startup and disruptor status.
‘Looking back, when we [Imperial Cars] were acquired, a number of us from the board went across into that business and were invited into many meetings, especially from my perspective as ops director of Imperial, to deliver some of our experience into those meetings and to talk about what we were doing and what we did well, which was to sell cars at volume, not make a huge amount of profit.
‘What we did [at Imperial] was build a business that was ahead of the curve in terms of what we did digitally back in 2015-16. That was part of what brought us to the attention of Cazoo as well as our logistics network and our ability for them to spin up a lot of collection hubs and storage centres.’
He added: ‘What was clear from the early days there was that they were firm in their mindset. Cazoo had a model that they were not going to deflect from because that’s what investors had invested in and that was pure online sales.
‘No matter what we said at that point, we were not listened to and that was their prerogative. They bought the business and clearly they had their own agenda and their own model and what they wanted to push forward.
‘Ultimately, at the point that I left, it was clear in my role as retail ops director that there was never ever going to be a physical retail opportunity, so that was pretty null and void.
‘I remember a conversation on exit, which was: “Look, in 12 months’ time, Neil, everything that you and the rest of the team have been telling us, we may think we should have listened to, but right now, we’re not making any changes.”
‘Whatever happened there since – and consequently until they switched and pivoted when Alex [Chesterman] left – at that point, they were getting closer to actually delivering some sort of gross profit per unit that was looking acceptable.
‘But by then, they’d burnt so much cash and the runway was looking shorter and shorter and shorter. Ultimately, they weren’t in a position to turn that around.’
‘Cazoo changed the landscape’
Despite the struggles of Cazoo since his departure, Smith insists that the outfit did achieve plenty of good.
He said that several ‘very intelligent’ worked for the company and that it ‘changed the landscape’ in certain areas of the motor trade.
However, the ex-director did admit to a sense of sadness that Imperial Cars was denied the opportunity to keep growing.
‘I am sad that it, for Imperial, ended as it did, i.e. most of us that were taken on from the board left within six months,’ he said.
‘Clearly the original founders of Imperial found it very difficult to work in that environment and very much felt that Imperial was a project that was not anywhere near finished.
‘I am sad for the fact that Imperial never got to really get to the point we thought we could take it to.
‘Also for those employees that were taken across and worked for Cazoo for a number of years and now they’re now out in the market again and the fact that actually there were some great people there in the business when we joined.
‘There were some very intelligent people and some very clever people in certain aspects.
‘I’m not going to use the word “phenomenal” again because I got completely trolled online last time for my statement last time that Cazoo did some phenomenal things but if we’re sensitive about it, there are certain aspects of what Cazoo did that actually have changed the landscape.’
The Car Dealer Podcast, sponsored by JATO, sees an industry guest join our hosts to discuss the motor trade’s biggest headlines of every week.
You can listen to all episodes of the Car Dealer Podcast on Spotify, or wherever you get your podcasts.
