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Blue Inc plans float to fund expansion

Blue Inc is to list on the Alternative Investment Market (Aim) as early as June, with the company planning to use funds to double its UK store estate to almost 500.

Financial adviser Cantor Fitzgerald has been hired to work on the IPO, which Blue Inc chief executive Steven Cohen said would happen before the summer.

He added: “The main focus is to raise new money in order to supercharge our ongoing growth plan - in particular investing in the existing store estate, which has already grown significantly in the last two to three years.”

Cohen said there was the “opportunity for up to 500 highly differentiated stores across the UK” in both prime and secondary locations. Cohen could not rule out the possibility of reopening a Blue Inc store on Oxford Street as it looks to “bring our concept to new customers around the country”, although he noted it would continue to grow cautiously.

Blue Inc has 240 stores, nearly 10 times the number it had when Cohen bought it in 2006. This has come both from organic growth and through bolt-ons from its acquisitions of D2 and Officers Club. Drapers understands that the business will be valued at about £60m.

Half the equity will go public and it is thought that between £10m and £15m could be ploughed back into Blue Inc.

Cohen declined to comment on specifics, but noted that investors such as Sir Stuart Rose - who is stepping down as chairman because of a conflict of interest with Fat Face, which is also listing and where he is also chairman - would retain their stake. Rose is being replaced by Ao.com chairman Richard Rose (no relation), and the board is also being boosted by Lord Leigh of Hurley, the Tory party treasurer and co-founder of Cavendish Corporate Finance.

As well as store expansion, the cash is likely to be used to roll out Blue Inc’s new storefit, which has been trialled in Luton and Peterborough. Funds will also be deployed to bolster its online arm.

“It is all about investment for the future,” Cohen said.

Blue Inc is also looking to build its international division. At present it has five franchise stores in the Baltics and two in Malaysia, and is in talks with possible partners in South America and the Middle East. Catherine Neilan

This story was first broken online. For more news, visit www.drapersonline.com


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