How many investment banks does to take to float a retailer?

How many investment banks does to take to float a retailer?

In the case of Ocado, which plans a July IPO, eight apparently. It emerged at the weekend that the home shopping firm was bringing on board five more to join the three already in place (see page 16). That’s Barclays, Goldman Sachs, Jefferies, JP Morgan Cazenove, Lloyds Banking Group, HSBC and Numis all on the ticket.

Ocado is not alone in preferring plenty of back-up as it prepares for flotation. At the start of the year, fashion group New Look also had a battalion of banks behind it - nine altogether, ranging from Credit Suisse to Investec.

Floating a company is a complex business, especially with increased underwriting risks post-credit crunch. But the danger is that the involvement of so many names can give an impression of cosy consensus and especially when information to unconnected analysts is restricted, the absence of dissent means that useful debate about a company’s flotation merits can be hard to come by.

The bonus culture

This week the world’s most successful retailer, Walmart, held its annual meeting. Founder Sam Walton once said that profit sharing with associates - such as discounted stock - was “the single best thing we ever did”.

It’s an interesting point to consider, the week after Marks & Spencer shared an £81m bonus. The sum was unexpectedly high but understandable - M&S may not have had its most glorious year but it rode the recession well and it was right to reward coalface employees.

Other retailers including Asda, John Lewis and Sainsbury’s have similarly made payouts to their staff. Is it a characteristic of success, as Walton maintained, that the best companies share their financial success throughout the business? It would be fascinating to see whether retailers that run such schemes have typically outperformed from an investment point of view. Does anyone know?