Retail Week Live: UK entering sustained phase of growth for successful IPOs

The new generation of disruptive retailers with forward-looking management teams “with vision, energy and a track record of success” will be the ones most likely to benefit from the opening retail IPO window.

That’s according to Robert Foster, managing director European co-head consumer and retail at Jefferies International, who told delegates at Retail Week Live that the UK is facing a “sustained new phase of growth retailers accessing IPO markets”.

According to Foster, winners of the new opening retail IPO market will be “companies with plenty of room to grow”. He also pointed to the importance of “new management teams with vision, energy and a track record of success”.

Retailers including AO.com have floated on the stock market this year.

For Foster, “the new generation of disruptive retailers” are what makes the UK IPO market such an attractive one. “For the first time in a long time public investors are being offered real access to all this innovation, entrepeneurship and growth,” he said.

In the past six months, there have been as many retail IPOs as the past 10 years, he claimed.

IPO pipeline

The pipeline of companies eligible for successful IPOs in the UK is of an extremely high quality, according to Foster, but the number is few - a trend that’s similar to the US.

In both the US and the UK there’s “a scarcity of opportunities to invest in growth”, he said, but this is a positive in the longer-term as it ensures better quality of retailers publically listing their businesses.

“I expect growth companies to continue to be rewarded for a long time to come.”

According to Foster, the US market has pointed the way with IPOs. “The US IPO market has been open and active for four years and investors made money in retail IPOs.”

‘The UK is a hotbed of innovation and will see more international retail brands over the next few years’

Robert Foster, Jefferies International

 

Foster described the UK retail market as facing “an exciting watershed”. “Customers expect to engage, browse, buy and collect, anytime, anyplace and anywhere,” he said. “UK retailers have been at forefront of global innovation.”

The UK can expect to see more international arrivals in the immediate future, Foster added. “The UK has always been home to world class retailers - it’s the nature of retail to experiment inexpensively and often. The UK is a hotbed of innovation and will see more international retail brands over the next few years.”

Foster concluded by claiming the IPO markets are “an important way of offering investors here and abroad the opportunity to participate in great British success stories”.