Some of retail’s rising stars are weighing up options to float as early as next year as sentiment towards the sector improves.

Discount brands e-tailer M and M Direct is understood to be considering its options, which could include flotation next year as it reaches the two-year mark since being bought by US private equity group TA Associates.

Young-fashion retailers Blue Inc and Supergroup, which runs Superdry and Cult Clothing, are also investigating potential IPOs for next year. Grocer Ocado also confirmed this month it is considering a 2010 float.

M and M increased sales 29 per cent to £95m in its full year to February and sources said its success and size means that its private equity backer may wish to “crystallise” its investment in the near future.

But M and M chief executive Steve Robinson said: “No one in the business or externally is working on anything at the moment.”

Blue Inc was bought almost four years ago by its management and has increased sales from £15m to a forecast £74m by next year. Chief executive Steven Cohen said it has the potential for more than 200 shops eventually. “We have the management team in place to lead a bigger business. We think 2010 could be a good time to float,” he said.

Singer Capital analyst Matthew McEachran said there could be the appetite for the right business at the right price. “The sector has had a bit of a re-rating in the last three to six months. It would benefit from having a few new names that are fresh.

“There are a lot of companies owned by venture capitalists that will not want to sit on them forever and are likely to exit.”

McEachran said that IPOs were only likely for the companies if potential investors were happy with valuations. He added those wanting to float would need a compelling medium- to long-term strategy.

But one chief executive of a private equity-backed retailer was sceptical that the market would be open so soon and described anticipation of a spate of retail floats as “bankers’ bullshit”.