In The Style is to sell the business for just £1.2m to avoid falling into administration.
The online fashion retailer, which was valued at £105m when it floated in 2021, has agreed for holding company In The Style Fashion Limited (ITSFL) to be acquired by private equity investor Baaj Capital.
Founder and chief executive Adam Frisby has agreed to take an equity position in the newly established bidco formed for the purposes of the sale and will become chief executive of the business on completion, while non-executive directors Nancy Cruickshank, Adam Bellamy and Matthew Scaife will also step down from the board on completion. The company also proposes to change its name to Itsum plc on completion to avoid any confusion with the In The Style brand.
The online fashion retailer launched a strategic review in December, led by investment bank Lincoln International.
However, it experienced “challenging” trading in January and February, which resulted in high levels of markdown and a reduction in wholesale demand. The retailer’s cash position has fallen from £3.2m at the end of December to £900,000 at the end of February.
It said: “As a result of this expected reducing cash balance and the expectation that the trading environment will remain challenging in the near term, the board is of the opinion that, in the absence of raising further funds or completion, there would be no alternative other than the company and ITSFL to enter into administration or some other form of insolvency procedure in due course.”
In The Style chair Jim Sharp said: “Following a thorough review of different strategic options with our advisers and interactions with numerous parties, the independent directors have unanimously concluded that it is in the best interests of the company, its shareholders and its stakeholders to sell In The Style Fashion Limited to Bidco.
“The independent directors therefore believe that under the new ownership structure – with Adam’s continued leadership and Baaj’s backing – the In The Style brand can continue to build on its potential whilst protecting the interests of the group’s employees, suppliers and other stakeholders.”
The news comes shortly after Frisby won his High Court battle against a rival who claimed he stole his business idea. The company revealed it was now forecasting its full-year adjusted EBITDA loss will be between £4.25m and £4.75m. It added it now also expected its revenue to be around £46m.
