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Laybuy companies have been put into receivership

Laybuy companies have been put into receivership

Buy now, pay later service Laybuy has gone into receivership.

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

Managing director Gary Rohloff said he was “absolutely heartbroken” by the decision.

“This is a devastating time for the Laybuy team and I will do everything I can to support them as we navigate this process.”

Laybuy’s business model lends customers a fixed amount of credit so they can pay for a purchase in six weekly installments.

Laybuy, like other operators in the buy now, pay later sector, suffered a downturn.

This model thrived during Covid-19 lockdowns, but the rise of rivals like Temu, consolidation, regulation and a slowing economy posed challenges.

Rohloff said the company has worked “incredibly hard” to achieve profitability.

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

He added that reduced consumer spending, higher credit losses and increased fraudulent activity are hurting the company.

“This, together with higher financing costs, created a perfect storm that was difficult to recover from.”

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

“For the avoidance of doubt, the UK-based entities and certain other entities in the Laybuy Group are not in receivership.”

Customers should pay as normal and did not need to take any other action at this stage, Deloitte said.

On Friday, Laybuy told merchants using the service that its payment offering had been suspended.

It added: “We do not currently have a resolution timeframe, but we will ensure you are notified immediately. Thank you for your patience.”