Smartphone refurbisher musicMagpie puts itself up for sale
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Second-hand smartphone seller musicMagpie is hunting for a buyer just two years after going public following the collapse of its share price and faltering US growth.
The Stockport-based company, founded in 2007 by Steve Oliver and Walter Gleeson, has called in consultants from Deloitte to consider its options, including a private sale.
Valued at over ￡200m in an initial public offering just over two years ago, musicMagpie’s share price has plunged and the business is now worth just ￡20m. Shares were trading at around 18p on Friday.
Sales have been declining since the pandemic, while cracking the US with its Decluttr brand has proved challenging. City sources said the company could seek a sale with a valuation in the region of ￡40m.
Revenues fell to ￡61.9m in the first half of 2023, down 14pc from ￡71.3m a year earlier. Sales in musicMagpie’s old business buying and selling unwanted DVDs also dropped more sharply than anticipated, down 17.4pc, as interest declined with the rise of Netflix and other streaming apps. Sales also suffered earlier this year from strikes at Royal Mail, which disrupted deliveries.
Sales at its US arm fell from ￡18.4m to ￡14.7m in the first half of 2023. It reported a ￡2.8m loss over the period and is currently sitting on ￡13.6m in net debt.
Describing its business as “re-commerce”, musicMagpie began life buying unwanted CDs from consumers before expanding into books, DVDs, video games and old gadgets.
It also recycles unusable mobile phones and refurbishes gadgets for resale. It sells the refurbished tech on its website as well as on Amazon and Walmart in the US. The company has been expanding its smartphone renting business, where customers pay a monthly fee to lease a phone.
Launched in 2007 out of a garage in Stockport, the company has grown to around 700 staff and ￡145.3m in revenues in 2022. It claims to have upcycled over 400,000 consumer tech gadgets.
Spokesmen for musicMagpie and Deloitte declined to comment.