8:47 am, April 9, 2024
Outgoing Cazoo boss Paul Whitehead says he is ‘proud’ of the company’s achievements despite its decision to pull out of used car sales as a result of crushing losses.
Cazoo announced that Whitehead would be stepping down from his position as CEO when it told investors of its plans to become an online advertising marketplace to rival the likes of Auto Trader and Motors.
The news came after months of mounting speculation about the outfit’s future amid huge losses, following years of exuberant overspending.
Writing on LinkedIn last week, Whitehead admitted that mistakes had been made along the way but insisted that he was proud of his time with the online retailer.
He also revealed that he will be staying on as an advisor to ‘support the transition to its new marketplace business model’, following his departure as CEO at the end of March.
In a lengthy post, Whitehead encouraged those who are staying with the company not to lose their ‘data-driven mindset’ and ‘entrepreneurial spirit’.
He said: ‘Since starting Cazoo from a sheet of paper a little over five years ago, it’s been an incredible journey and it’s been an absolute privilege to lead an amazingly talented team of 5,000 people at its peak, across the UK and Europe.
‘Following the recent strategic review of the business, I decided that my time as CEO should come to a close at the end of March.
‘This wasn’t an easy decision – Cazoo means a lot to me but I have agreed to remain as an advisor to the business to support the transition to its new marketplace business model.’
He added: ‘Looking back, we have accomplished so much, made mistakes along the way for sure but learnt a lot at the same time. I am incredibly proud of what we achieved together.
‘Thank you to everyone who has shown such an amazing passion and energy for the Cazoo customer experience. For those staying as part of the transition, please never lose your data-driven mindset, but above all your entrepreneurial spirit.’
In a bombshell announcement to investors last month, Cazoo said it would be ‘unwinding’ its stock and selling it via retail and wholesale channels.
It will also make further job cuts – following the large swathes of redundancies it announced last year – as it moves to being a marketplace.
The announcement followed the shake-up of the board and founder and former CEO Alex Chesterman’s departure in December when the financially troubled company restructured its debt in a deal that saw its $630m borrowings converted to just $200m.
Despite recent headaches, Whitehead says Cazoo ‘broke the mould’ in the used car market and ‘created a new category for buying and selling a used car online’.
He said: ‘Five years ago it wasn’t possible to buy a used car entirely online in the UK.
‘We set out to break the mould and create a new category for buying and selling a used car online and we have sold 160,000 cars this way.
‘The Cazoo brand and platform attracts one million customers a month, is firmly established and has led the category.
‘We now plan to leverage all of this for the benefit of the automotive industry.’
‘Disrespecting industry peers’
Throughout its chequered history, Cazoo has taken several swipes at traditional dealers, who it now seemingly expects to put their hands in their pockets to advertise on its site.
Chesterman angered used car dealers when he arrived on the motor trade scene and labelled them ‘sharp-elbowed salesmen’. He also claimed that the traditional method of selling cars was ‘flawed on every level’.
The Zoopla and Love Film founder lambasted dealers for only offering ‘7 minute test drives’ and claimed buying a car from a dealership was ‘inconvenient’.
Given that somewhat fractious relationship, it is perhaps unsurprising that Whitehead’s post was not met with a huge amount of positivity from the motor trade.
Responding on LinkedIn, motor trade investor Bruce Beaton said: ‘It’s been a disaster. Ego sponsorship, low margins, burning other peoples cash and disrespecting industry peers. Not a lot of talent on show.’
Gregor Menzies, general manager at Bargain Cars Angus Ltd, added: ‘If anything Cazoo has proved what those of us clued up in the industry have said for a long time which is that a complete online model doesn’t work, that’s one of the reasons why it’s gone bust.
‘The majority of consumers still like to touch, smell, feel and drive before they purchase.
‘A vehicle purchase is the second biggest item people make and so in my experience they rightly expect that personal touch rather than faceless representation all driven by accountancy and greed.
‘Indeed, it’s a talentless approach to what used to be a skilled and personable industry.’
Another dealer, with a quarter of a century of experience in the motor trade, accused Whitehead of having an ‘alternate reality’, when it comes to Cazoo.
You can learn more about the history of Cazoo here. Alternatively, you can watch our special documentary all about the firm’s rise and fall below:
