Blue Inc IPO set to be oversubscribed as investors seek niche retail stocks

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Young fashion retailer Blue Inc’s impending IPO is set to be oversubscribed allaying fears that investors are shunning retail stock.

A source close to the situation said that Blue Inc, which is being advised by Cantor Fitzgerald, looked likely to have a full order book ahead of its flotation, which is slated for June 19.

Meanwhile, discount online etailer MandM Direct unveiled its intention to float this week as it lined up former N Brown boss Alan White as its chairman.

The etailer, which is owned by private equity firm TA Associates, is thought to be valued at £140m to £170m and is seeking to float on AIM.

The move comes weeks after fashion retailer Fat Face abandoned its IPO after valuations softened due to “retail IPO indigestion”, boss Anthony Thompson told Retail Week last week.

The weak performance of recently floated retail stock is also thought to have impacted investor confidence in the sector. However, the source said there was still appetite for “differentiated” retailers. It is thought that Blue Inc’s niche audience of boys and young men is appealing to investors, along with its record of consistent growth.

Blue Inc has experienced eight years of growth since its acquisition by Marlow Retail, an investment vehicle led by chief executive Steven Cohen, while Fat Face has recently emerged from a turnaround.

MandM Direct’s decision to float comes after fellow online players Boohoo.com and Ao.com floated with hefty valuations. Both etailers are now trading below their offer prices.

MandM Direct, which is being advised by Canaccord Genuity and Investec, is planning to invest some of the proceeds into launching more local language websites. International sales soared 54% in its last financial year and accounted for 11% of total revenue.

Jonathon Brown, chief executive of the etailer, said: “We are well positioned to benefit from the trends towards online retail and have a clear strategy to develop our UK and to expand our European businesses. This listing represents an exciting stage in our development and will give us the opportunity to further accelerate our growth.”