Gear4music tunes up for strong Christmas trading period

MUSIC retailer Gear4Music has agreed a deal to acquire the software development team behind its e-commerce platform while it said it is well positioned heading into the Christmas period after posting strong revenues in its half year results.

The York-based group, which completed its IPO in June 2015 raising £10.3m, has reached an agreement with its software development partner Venditan to acquire the development team and bring them into the Gear4music fold.

Gear4music said the deal will enable it to cost effectively ramp-up its development capability to bring key projects on-line faster, and further support the growth of the business.

Twenty four staff including Venditan’s chief technology officer Thomas Walder will transfer across to the group in January for a total consideration of around £1.5m. 

Gear4music reported UK revenue of £13.8m, up 44%, and European revenue of £7.8m, a 169% increase, in the six months to August 31.

As the company’s success in Europe continues apace, it also announced it has signed a lease on a German distribution centre, while its Swedish operation is on track to be operational in next month.

Andrew Wass, chief executive, said: “I am extremely pleased that during the last six months we have combined strong trading with significant strategic progress, as we continue on our journey to be one of Europe’s leading online retailers of musical instruments and equipment.

“Accelerating sales growth into Europe, which represented 40% of our total sales during the last two months of the period, has reinforced our decision to expand our distribution capacity in Europe and further enhance our customer proposition.

“To underpin our strong growth and physical geographic expansion, we are pleased to announce that our software development team will be brought in-house and, with further recruitment planned, expanded even faster to ensure we continue to build a market leading e-commerce platform.

“Whilst we continue to invest to grow the business it is pleasing to have generated significant profits during the last six months, when historically we’ve produced the majority of our profits during the second half of the year.

“Trading remains strong heading into our important Christmas period and the board considers the group well placed to deliver results for the full year that will be ahead of its previous expectations.”

Gear4music will issue a trading statement in January.