Very Group owners pick banks for £4bn online shopping group IPO

The family behind one of Britain’s biggest online shopping empires have picked a trio of investment banks to steer it through a £4bn flotation.

Sky News has learnt that Very Group, which was previously known as Shop Direct, is lining up Barclays, Morgan Stanley and UBS as the global co-ordinators of an initial public offering (IPO) that is likely to take place next year.

The banks’ appointment comes just days after Very Group launched a £575m bond as part of moves to reorganise its balance sheet.

Very is owned by the Barclay family, proprietors of the Daily Telegraph and former owners of London’s Ritz Hotel.

Sky News revealed last month that the Barclays had appointed STJ Advisors, which works with companies ahead of public listings, to prepare Very Group for a stock market debut.

If they proceed, it would be the first time that the Barclays have taken one of their flagship companies to the public markets.

Insiders have nevertheless cautioned that a partial stake sale, with the company remaining privately held, continues to be an option.

The Barclay family has owned Very Group for nearly 20 years, during which they abandoned its historic Littlewoods catalogue and stores as consumer shopping habits migrated online.

The site sells clothing, electrical goods and toys, among other categories, and has become one of the UK’s biggest online retailers.

The Barclay twins – Sir David and Sir Frederick – built one of Britain’s biggest private business empires, spanning media, property and retail assets.

Sir David’s death earlier this year is said to have accelerated a further evaluation of the family’s corporate interests.

A flotation of Very Group would be a logical move given the online shopping boom spurred by the coronavirus pandemic.

Full-year results for the 12 months to the end of June 2020 showed revenues of more than £2bn for the first time

Key questions for fund managers who are approached about buying Very Group’s shares in an initial public offering will be the company’s ongoing governance structure and the extent of the Barclay family’s continued ownership.

They will also be expected to seek reassurance about the company’s confidence in its future sales and earnings growth.

Very Group is run by chief executive Henry Birch, the former Rank Group boss.

A number of online retailers, including THG Holdings, the owner of The Hut Group, have gone public in the last 12 months and seen their valuations subsequently increase.

Taking one of their corporate interests public would be a radical departure for the Barclays, who have always been fiercely protective of their privacy.

This year’s Sunday Times Rich List estimated that the family had amassed Britain’s 28th-largest fortune, worth £6bn.

While high street chains have invariably been struggling to stay afloat, Very reported in its recently concluded financial year what it described as record-breaking Christmas and Black Friday trading performances.

The Barclays previously explored the possibility of bringing in external investors to Very Group in 2017, when it held talks with a number of large private equity firms.

A spokesman for the company declined to comment on Friday.

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