Laybuy Suspends Services Amid Financial Struggles
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- Laybuy has suspended all payment options, leaving merchants and customers in uncertainty.
- The company faces potential receivership due to the failure to find a rescue buyer.
- Laybuy has faced significant financial challenges, including layoffs and delisting from stock exchanges.
Laybuy, a Kiwi buy-now-pay-later (BNPL) operator, has suspended its payment services, leaving merchants in a lurch. Founded in 2017 by Gary Rohloff, a seasoned retailer who previously managed brands like Number One Shoes, Warehouse Stationery, and Ezibuy, Laybuy aimed to provide a safe and easy alternative to credit cards. Related: Torpedo7 Closes Multiple Stores as Ownership Changes
Today, the company informed merchants that all payment options are currently suspended. In a email, Laybuy stated, “Laybuy’s services are currently suspended, including all payment options,” and added, “We don’t currently have a resolution timeframe but will ensure you are immediately notified. Thank you for your patience.” The company’s website also mentioned undergoing maintenance and promised to be back soon.
Gary Rohloff, when contacted, indicated that he was actively working on resolving the issue but did not provide further details. BNPL services like Laybuy allow customers to pay for purchases in instalments while merchants receive payment upfront.
Laybuy’s troubles began to surface last year. In January 2023, the company announced plans to delist from the ASX following a significant drop in its share price. In March, Laybuy revealed staff layoffs as it struggled to achieve profitability. A Canstar survey in the same month showed that only 12% of Kiwis had BNPL debt, down from 19% in 2021.
The company’s financial instability has been further highlighted by its recent attempts to find a rescue buyer, which have so far failed. As a result, Laybuy is now on the brink of receivership, though a sale might still be possible. The firm’s payment products have been unavailable since Wednesday, with a website statement claiming maintenance issues.
A collapse of Laybuy would endanger approximately 70 jobs at its Auckland headquarters. The company, which once had 766,000 customers across the UK, Australia, and New Zealand, has seen a significant decline in active users, particularly in the UK, where numbers dropped from 610,000 in March 2022 to around 484,000 by the end of the year.
Laybuy’s delisting from the Sydney exchange and subsequent move to New Zealand’s Catalist, a junior stock exchange, reflects its ongoing struggles. The company’s value has plummeted to around £2.79m on Catalist, a significant drop from its peak valuation of $358m (£184m) when it raised $80m (£40m) in 2020.
In April, Laybuy removed major retailers like Amazon, eBay, and Marks & Spencer from its platform. The BNPL sector, including Laybuy, has faced increased competition, regulatory pressures, and a broader tech sector slowdown due to rising costs and limited funding.