Etail group DRL, owner of AO.com (formerly Appliances Online), has this week moved a step closer to a stock market flotation after hiring banks Jefferies and JP Morgan.  

Etail group DRL, owner of AO.com (formerly Appliances Online), has this week moved a step closer to a stock market flotation after hiring banks Jefferies and JP Morgan.  

There is an appetite for public listings among investors, with some City sources saying the market is the most buoyant it has been since the 2008 financial crisis. 

AO.com is a niche player, operating in the white goods sector, but it has made a real impact with consumers. What started as an online business claiming to offer the cheapest white goods has evolved to be as much about customer service as price – a good move considering electricals giant Dixons’ aggressive pricing strategy. 

AO.com, which sells direct to consumers as well as for major retailers such as Argos and Next, now has profits of more than £8m and operates a service-led approach. Not only are its adverts funny and its social media activity truly innovative, its sense of humour has given the brand a human touch. AO.com has more than 1.3m ‘likes’ on Facebook, while Currys PC World has just over 250,000. It is not just another faceless website. 

AO.com is also an extremely efficient business – it offers next day delivery, free standard delivery and returns, and also runs an impartial reviews site. And the recent rebrand to AO.com came to pave the way for future expansion beyond kitchen appliances. 

It isn’t just retail that is testing the market, however. One City broker said there are around 15 names being talked about at the moment and there is only a short amount of time to get the process underway before the window shuts around November until spring time. 

The risk of waiting too long is that investors will suffer deal fatigue, but AO.com brings something new to the table and, being valued at £300m, it falls into the mid-cap bracket where there is demand. The retail sector has started to polarise, with the £100m companies at one end and the £1bn+ at the other. The mid-caps are needed to fill the void. 

AO.com seems set to draw in as many ‘likes’ among investors as it does from customers.