BrightHouse’s appointment of adviser Rothschild last week suggests the run of retail IPOs may not have dried up just yet.

The run of retail IPOs may not have dried up just yet.

Last week it emerged rent-to-own specialist BrightHouse had appointed adviser Rothschild to examine options, including a possible flotation.

BrightHouse prides itself on knowing its customers intimately, and believes it can be resilient both in good times as well as bad.

It has shown growth in all the years Vision Capital has owned it since 2007 – most recently, in the year to March 31, EBITDA was up over 10% and sales up over 12%.

Such a close relationship with customers – most of the time it will see its customers every week as they come in to make payments – gives BrightHouse a good grounding to grow from. And it has the market almost cornered because its nearest competitor is tiny in comparison.

In terms of investor appetite, while the spate of retail IPOs has produced its fair share of disappointment in terms of share price falls post-flotation, there have been notable winners. And those successes have tended to be businesses targeting the value sector. Poundland and Bonmarche are two examples.

But what may concern some investors is the controversial nature of the business.

BrightHouse offers customers weekly payment plans on products such as microwaves or TVs, charging annual interest rate (APR) of up to 69.9%. It is a model which has attracted criticism from those who say it exploits people who cannot get credit elsewhere.

Long-standing boss Leo McKee has defended its ethical principles though, and it is regulated by the Financial Conduct Authority. Other businesses targeting low-income households such as payday loan lender Wonga are different models, but have struggled to get an IPO away because of the stigma.

McKee and his established management team have an interesting story to tell, and there is growth potential. He told Retail Week earlier this year that he wants to take its store count from 286 up to 450 alongside growing its multichannel potential.

In the US, established players such as Rent-a-center and Aaron’s show how much potential there is in this market. Now it is up to McKee and his team to try to ease any concerns potential investors might have.