MandM Direct to reveal £170m IPO

The discount online clothing business MandM Direct is to become the latest retailer to reveal plans to float.

The company is likely to announce its intention to float as early as Tuesday, with the IPO valuing the business at roughly £140m to £170m.

MandM Direct, which is being advised by Canaccord and Investec, sells off excess stock at discounts of up to 75pc on behalf of a collection of fashion and sports brands.

The business was founded in 1987 to buy and sell end-of-line sports goods, but its sales have grown significantly in the last few years. It is owned by private equity group TA Associates, who bought into the business in 2007, while management also have a small stake.

MandM Direct is led by chief executive Jonathon Brown, who used to run John Lewis’s online business. The company has hired the former chief executive of catalogue retailer N Brown, Alan White, to be chairman.

There have been concerns in the City that the window for IPOs is closing after Fat Face was forced to scrap plans to list and Saga only got away at the bottom of its guidance.

MandM Direct hope to get its float away by tapping into demand from investors looking to build exposure to online retailing. However, some institutions have been wary about investing in IPOs where the company being sold is controlled by a private equity group.

One of the company’s rivals, Boohoo, floated earlier in the year, while online retailers Ocado, Asos and are also listed.

M&M Direct is looking to list on the junior Aim market. In the last financial year, M&M Direct recorded a 9pc increase in sales to £119m and a 21pc rise in earnings before interest, tax, depreciation and amortisation to £10.5m. It claims to serve 1.3m households across Europe.

The company believes it can grow by expanding its range of products, boosting brand awareness, and moving into new markets outside the UK.

It has already launched local websites in Ireland, Germany, France, Austria, the Netherlands and Poland, but plans to build new sites in the next two years.

The company sells more than 250 brands across fashion, sports and outdoor clothing. The brands include adidas, Fred Perry, Diesel, Nike, Ted Baker, and Timberland. It has also developed a collection of nine own brands, including DuFFs and Kangaroo Poo.

M&M Direct claims its success is based on building close relationships with the brand so it can gain access to their end-of-line stock.

The company was founded in Stourbridge in the Midlands but moved to Leominster in Herefordshire in 1994.


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