Adam Frisby toasted the float of his fashion business In The Style this month with a single glass of champagne. Few would have begrudged him a grander celebration.
Frisby was kicked out of home at 15, chucked on a train with 50p in his pocket and told he would never amount to anything. After stints flipping patties at Burger King and working as a cashier at Barclays bank, Frisby started buying dresses from wholesalers and selling them via social media from his bedroom in 2013.
That venture became online fashion retailer In The Style, which listed on AIM at a valuation of £105 million, netting Frisby about £12 million. Not bad for a guy without a GCSE to his name.
Frisby’s story may be unusual but the conundrum facing investors evaluating the recent raft of tech floats is becoming all too familiar: will In The Style’s recent growth outlive the pandemic?
It was only three years ago that the cold snap dubbed the “Beast from the East” almost put In The Style out of business. Irish private equity firm Causeway Capital came to the rescue with a £2.5 million investment in exchange for a controlling stake. The firm has already made back more than ten times its original outlay.
In the 12 months to April last year, In The Style recorded a £2.2 million pre-tax loss on sales of £19.3 million — but in the nine months that followed, when lockdowns forced shops to close for months, the retailer swung to a £2 million profit on sales of £35.4 million.
Frisby, 32, maintains that In The Style’s growth last year was boosted by its quick switch from selling dresses to lockdown-friendly jogging bottoms, as well as its decision to ramp up the release of new collections using social media influencers.
Long-term partnerships with the likes of Towie star Billie Faiers and Love Island’s Dani Dyer have been central to In The Style’s growth, with influencers getting paid a commission on profitable sales of the collections they promote.
With almost half its clothes made in the UK, In The Style’s lead times are typically between eight and ten weeks, which is quick — but still slower than Boohoo.
To calm investor nerves about any potential exposure to slave labour, In The Style commissioned an independent audit of its supply chain before its float, which found it had made commendable progress establishing an ethically compliant chain, which is limited to just 41 suppliers.
After the listing, Frisby retained a 23.1 per cent stake and Causeway still holds 14.5 per cent. Joining them on the register are institutional investors including Lombard Odier Asset Management and BlackRock.
After floating at £2 a share, In The Style closed last Friday at 235p a share, valuing the business at £123 million. So far, so good — but investors should wait for evidence that recent performance isn’t just a passing fad. Avoid.
