In The Style agrees to 1.2 million pound sale of subsidiary following strategic review

Fast fashion e-tailer In The Style has agreed to sell its operating subsidiary, In The Style Fashion Limited (ITSFL), for a total cash consideration of 1.2 million pounds following the completion of the company’s strategic review.

The retailer struck up the deal with private equity investor Baaj Capital, a UK-based firm that has previously invested in the likes of Leading Labels, Lissom Shoes and Fever International, in a move that allowed it to avoid potentially falling into administration.

As part of the deal, In The Style founder Adam Frisby, who returned to the CEO position late last year, has agreed to take an equity position in the newly formed company ITS Holding 2023 Limited, established for the purpose of the sale.

The position is the equivalent of Frisby’s current holding in the company and will also see him become CEO of ITSFL on completion of the sale.

In The Style launched its strategic review in December 2022 alongside its financial adviser Lincoln International, initially setting out to target a stronger market capitalisation, which it believed could be “better realised under an alternative ownership structure”.

While it was noted that the review may not result in a sale, the company did launch an offer period for potential bidders.

During this time, the board said that it had reviewed various strategic options, and had discussions with several potentially interested parties, some of which were deemed not viable on an acceptable timescale. It added that none of the proposals involved an offer for the whole company.

Independent directors to step down on completion of sale

Ultimately, Baaj was selected to takeover the business in light of the firm’s scale and expertise, as well as In The Style’s near-term trading environment and current liquidity position, which it had previously stated was “limited”.

In The Style directors have recommended that shareholders approve the total cash sale, which is to be payable on completion, after which non-executive directors Nancy Cruickshank, Adam Bellamy and Matthew Scaife will step down from the board.

Additionally, ITSFL will change its name to Itsum to "to avoid any confusion with the In The Style brand and to reflect the company becoming a cash shell".

In a regulatory filing, Jim Sharp, chair of In The Style, 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 ITSFL to Bidco [Baaj].

"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."

In January, In The Style lowered its profit guidance as a result of a “challenging” period in the month prior.

The Manchester-based company reported a 22 percent drop in revenue in the three months to December 31, 2022, while direct-to-consumer revenue fell 13 percent.