- A popular retail credit app in Australia and New Zealand crashed
- Laybuy said it will not accept new customers or purchases.
- READ MORE: Major changes to the Afterpay app
Buy now, pay later service Laybuy has fallen into financial trouble and its businesses in Australia and New Zealand have been placed into receivership.
Laybuy offers an alternative to credit cards, allowing customers to purchase items and pay them off in six interest-free payments.
It told customers that as of June 17 most of its services are not working, but that payments are still due and in process.
Laybuy was founded by Gary and Alex Rohloff in New Zealand in 2016 before expanding to Australia and the UK, with the business valued at $358 million at its peak.
The company’s British subsidiary is not affected.
Laybuy’s platform remains partially offline, so new customers cannot register and existing customers cannot make new purchases.
Customers will still be able to access the app and manual and automatic refunds will continue to work. The company said it was “assessing the situation regarding refunds.”
Late payments will incur a fee and accounts more than 42 days late may be referred to a debt collection agency.
The Australian and New Zealand app Laybuy, which allows you to buy now and pay later, has been placed in suspension of payments
Founders Alex and Gary Rohloff (pictured) launched the business in New Zealand before expanding to Australia and the UK. CEO Gary Rohloff said he was devastated by the company’s financial problems.
Deloitte Australia’s Glen Kanevsky and Jason Tracy have been appointed receivers and managers of Laybuy Australia Pty Limited.
David Webb and Robert Campbell of Deloitte New Zealand have been appointed receivers and administrators of Laybuy Group Holdings Limited and Laybuy Holdings Limited.
Unlike liquidation, a bankrupt company can return to business once its debts are paid.
Chief Executive Gary Rohloff said he was devastated by the company’s financial problems.
“We had been working incredibly hard to execute a plan to achieve profitability after years of rapid growth,” he said.
Customers will still be able to make payments and they will be deducted as normal, but the app is not accepting new customers or new purchases.
Rohloff said attempts to sell the Laybuy business “failed at the last hurdle” and the board had no choice but to place much of the business into receivership.
‘While we have made good progress over the last two years, the economic crisis has been longer than we expected and this has had a significant impact on the retail sector in both New Zealand and the UK.
‘As a result, we have seen reduced consumer spending, increased credit losses and an increase in fraudulent activity.
“This, along with rising financing costs, created a perfect storm from which Laybuy found it difficult to recover,” he said.
