In The Style: Why fast-fashion brand once worth over £100m was forced to sell itself in cut-price deal
The full story behind why fast-fashion brand In The Style was forced to sell itself for just £1.2m to avoid collapsing into administration has been revealed for the first time.
The Manchester-headquartered business had floated on the London Stock Exchange’s AIM in March 2021 with a market capitalisation of £105m, having been founded by Adam Frisby in 2013 from his bedroom with £1,000 in redundancy money.
However, its financial performance steadily declined over the following two years since its IPO and a cut-price deal to save the brand was secured towards the end of March 2023.
Now, newly filed accounts with Companies House have fully revealed the financial pressure In The Style was under in the year leading up to the deal.
In The Style is now a private company, and owned by Baaj Capital LLP, which was founded by Jas Singh.
The results are also the first since Mr Frisby recently resigned for a second time as chief executive.
In the latest financial accounts, In The Style’s revenue fell from £57.3m to £45.9m in the 12 months to March 31, 2023. Its wholesale revenue was cut from £12.6m to £6m while e-commerce fell from £44.6m to £39.9m.
The results also show that its pre-tax losses widened from £1.5m to £7.7m over the same period.
‘Challenging market environment’
A statement signed off by the board said: “Despite facing a challenging market environment, the company has achieved significant advancements in successfully executing crucial operational and strategic initiatives.
“Direct-to-consumer revenue declined by 11 per cent overall year-on-year to £40m, with a 1 per cent decrease in the first half of the year and a 21 per cent decline in the second half, broadly in line with well-documented industry peer performance, adversely impacted by the cost-of-living crisis in the UK.
“The company showed improvements in key customer metrics, including a 0.1 per cent increase in conversion and an 8 per cent increase in average selling price per unit.
“Momentum was continued in optimising our influencer-based business model. We realised notable achievements, launching over 140 collaborations and introducing over 2,500 new products.
“Our collaborations over the past year included established partnerships with Stacey Solomon, Jack Jossa, Perry Sian and Carys Whittaker, and 6 new partnerships with influences such as Yasmin Devonport and Georgia Louse.”
In The Style added: “The company’s wholesale channel faced challenges due to the prevalent issue of excess inventory in the broader market environment. Wholesale revenues decreased by 52 per cent to £6m to represent 13 per cent of total revenue.
“Established retail partnerships include Asos, Freemans, Zalando, Lipsy, Shop Direct, Studio Retail and About You. International sales remained modest at £3.2m, notably, they persist as a growth opportunity in the coming years.
“The well-documented disruptions to worldwide supply chains, inflationary pressures and the Russia-Ukraine conflict affected our operations.
“As a result of cost management, agility in product sourcing, strategic retail pricing and promotional spend optimisation these challenges, along with FX pressure, were well managed.”
Founder Adam Frisby resigns as chief executive
Two weeks before In The Style published its latest set of accounts, founder Adam Frisby announced he had decided to step down as chief executive for a second time.
Mr Frisby, who founded the brand from his bedroom in 2013, originally stepped down in January 2022 but returned as CEO in December that year.
In a statement posted on LinkedIn, he said: “After 10 amazing years of In The Style… it’s time for me to say goodbye! (For now).
“Following months of reflection I have made the decision to step down as CEO.
“As you all know, I absolutely love ITS, it’s my baby, I’ve put my heart and soul into it over the years and it is without doubt the proudest achievement of my life!
“The stress and pressure that comes with running a business is at times unimaginable, It’s been no secret that the last couple of years have taken a personal toll on me and the thing I’ve learnt above all else from this journey is to be more kind to yourself; prioritise your emotional well-being and be more present in the lives of people you love. After all, life is too short.
“ITS has turned such a corner this last year, it’s back to profitability and doing so well – it has such a bright future & this has solidified my decision.
“To the whole ITS team, collabs, partners, customers, everyone in fact who has played a part in the ITS story – thank you. There’s so many of you who have been so significant to ITS and you know who you are. This isn’t just my brand, it’s all of ours and it’s going to continue to be such a special one.
“And of course to Jamie my partner, Thank you for helping me, a guy who had no qualifications, experience or money – feel supported and loved enough to believe in himself and embark on this journey. I’m so lucky to have somebody like you by my side every step of the way.
“Although I am stepping down, I want to be clear that I’ll always be the founder of ITS. I am still a shareholder and I’ll continue to support the business in many ways. The new MD I have appointed Ben Armstrong is such a fantastic guy. I not only wish him all the success but I’ll be there to support him every step of the way.
“I could never of imagined in my wildest dreams everything ITS would achieve when I started it 10 years ago and I really hope if I stand for anything; it is to believe in yourself and just give it a go.”
Istarm plc’s search for a deal
When the In The Style brand was acquired, the deal left behind a cash shell listed on the London Stock Exchange’s AIM.
However, shares in Istarm plc were suspended in September 2023 after it missed a deadline to complete a takeover deal.
The company had been seeking a deal since July when the boss of the company set to operate the UK National Lottery from next month handed it a lifeline.
David Craven, the chief executive of Allwyn, joined the board alongside Jean-Paul Rohan but no deal was secured.
At the time, Itsarm plc said it had been exploring “two opportunities” which included a “consumer/retail-focused” business and that talks were in an “early stage”.
If a deal can be agreed, the company said last September that it hoped it would be done by March 27, 2024. If not, its admission to trade on AIM would be cancelled.
In The Style founder Adam Frisby is the largest single shareholder in Itsarm, holding over 23 per cent. Other major shareholders include Chelverton, Paul Masters, Afzal Valli, Andrew Batchelor, Alastair Bruce, Octopus and Canaccord.
Last year, Itsarm plc changed its registered address to Buckshaw Village in Lancashire.