New appointment brings public company experience on board as fashion retailer limbers up for IPO

Fashion retailer Blue Inc has appointed a finance director with public company experience as it gets into shape for a proposed flotation, which may come as early as next year.

The retailer has also posted a surge in profits and expects continued progress this financial year.

Mike Rainer, who formerly held senior roles at Selfridges and Marks & Spencer and was most recently director of finance at Mothercare, joined Blue Inc on Monday.

Chief executive Steven Cohen, who led the acquisition of the retailer in 2006, said no final decision had been taken on a float, which will depend on market conditions. The retailer, which has lifted store numbers from 28 four years ago to 95 now, is understood to be talking to potential advisers.

Cohen said: “We have got great growth prospects and Mike’s appointment strengthens the management team and brings very strong public company experience.

“We’ve always said an initial public offering (IPO) is a possibility but it will depend on market conditions - we don’t need to float.”

EBITDA in calendar year 2009 rocketed 34% to £2.5m on sales up 25% to £39.8m. Pre-tax profits surged 30% to £1.3m. This year the retailer expects EBITDA to reach £3.4m on revenues of £48m.

Cohen said the retailer had benefited from the development of own labels such as Twisted Soul, association with celebrities, including bands such as N-Dubz and JLS,

and the loyalty of its urban customer base.

The IPO market remains uncertain for retailers. New Look pulled its proposed flotation earlier this year and is understood to have no plans for another attempt until 2012. SuperGroup, however, got its float away and its shares have performed strongly.

Seymour Pierce analyst Kate

Calvert said the market would respond to potential floats on a case-by-case basis. She said: “If you’ve got a good growth story, investors will be interested.”

Investors remain wary of private equity-backed companies coming to market, she said, and are determined not to overpay. She believed Blue Inc could “fit into the growth mould” and observed: “The best stories are those you catch early - like Dunelm and SuperGroup.”