Boohoo steps out in style as retailer makes strong AIM debut

SHARES in Boohoo, the Manchester-based online, own brand fashion retailers made their debut on AIM today, raising £300m and netting a fortune for its founder Mahmud Kamani and his family.

The company, which had a market value of £560m on admission, saw its shares rise sharply in early trading, rising from 50p to 80p.

The £50m proceeds for the company will be used to accelerate its expansion and enhance its working capital base. A proportion of the money raised will be used as part of a development plan to grow the distribution facilities and repay a mortgage on its Burnley warehouse, in addition to funding the infrastructure and IT systems to support future international growth.

Around £240m will be used to repay the Convertible Loan notes held by existing shareholders.

Commenting on the announcement, Mahmud Kamani and Carol Kane, joint chief executives of boohoo, said: “We view the support from investors as a strong endorsement of the company’s growth plans and we look forward to creating value for our new shareholders as we begin life as a public company.”

Manchester-based Zeus Capital is acting as Nominated Advisor and Sole Broker to the Dale Street-based business, and is the latest of several IPOs Zeus has led, including DX Group, 4dpharma and Conviviality Retail.

Nick Cowles, corporate finance director said: “We are delighted to have advised on its IPO, the second largest corporate IPO on the AIM market since its launch in 1995.

“The £300m placing will provide the business with the required resources for its international expansion plans and has enabled a partial exit for its founding shareholders.
“Public markets are extremely strong at present, which we expect to continue for the foreseeable future with a number of businesses coming to market from a broad range of sectors. Confidence has undoubtedly returned to the market with significant capital being deployed for opportunities with an interesting story, a strong management team and strategy for growth.”

Legal advice to Boohoo was provided by corporate partners Elia Montorio and Stephen Devlin at DLA Piper in Manchester along with the Pannone Corporate.

Elia Montorio said: “This is a real success story and we are delighted to have been able to advise this Manchester based business on its IPO and to be involved in such an astonishing and rapidly growing e-commerce business.”

The Pannone Corporate team was led by corporate partner Steven Grant and included Victoria Dolan, Tom Hall, Mark Winthorpe and Helen Smith..

Mr Grant said: “We have worked with co-founders and joint chief executives  Mahmud Kamani and Carol Kane for a number of years over which time the business  has grown into the UK’s leading online own brand fashion retailer.

“The flotation will enable to further capitalise on the opportunities in the rapidly expanding online retail market and fulfill its growth aspirations.”

Zeus Capital was advised by the Manchester office of Addleshaw Goddard, led by corporate partner Roger Hart and assisted by legal director Shelley McGivern.

Nick Boden a partner at PwC in Manchester and the reporting accountant for the float, said: Nick Boden, partner at PwC in Manchester and reporting accountant on the Boohoo IPO said:  “This successful IPO is a credit to the boohoo team and what they have created, which is an exciting business with enormous future potential.

“We are proud to have been part of this deal, using our skills and experience to help a great local business like this, become a major listed plc on AIM.”