Arcadia billionaire invests in Australian online retailer

Arcadia owner aquires 25% stake in flash sales site as it breaks into American and British market.



19 May 2014

After nearly three decades, Sir Philip Green is tipped to return to the stock market with a significant investment in online fashion discount site, MySale. Within the year, MySale aims to utilise the buoyant market for initial public offerings in e-commerce. Although his last involvement with a quoted company in 1988 failed to reach profit forecasts, he was ousted from Amber Day in 1992; Green believes this company is worth the potential reclamation. Green finalised the merchandising agreement for an undisclosed price last week.

MySale is the biggest provider for online flash sales of clothing and accessories in Australia and Asia. Although only seven years old, MySale had impressive sales of £102 million in 2013 and are projected to grow 40% ahead this year. It also has managed to strengthen its membership base to over 10 million member and is continuing to grow by more than 200,000 members a month. "90% is sold before they even buy it. I like that model" says Green.

Carl and Jamie Jackson, brothers and creators of MySale are ecstatic to be working with Green on the new partnership. "His network globally is something that you couldn't buy, which is [built from] 40 years of retail knowledge", says Jamie Jackson. The deal is likely to benefit MySale private equity backs, such as Insight Venture Partners, which earned a 27% interest after paying $14.5 million when MySale was a start-up in 2010. Green's interest is expected to create many further growth opportunities for the company.

With the company's increasing success, there has been great consideration to make a public offering. MySale has been urged to go public since early 2013 by the Australian Securities Exchange for as much as $500 million. However, at this time the idea was dismissed to pursue a strategic investor over an IPO. Now, with the new partnership with Green it is likely that the public will get its chance. The agreement with Green will help to expand the MySale supply chain and impose a reverse-season business model to boost revenues further. In the next two months the MySale websites will go live in the UK and US.

Its expansion will allow MySale to exploit counter-seasonal trends for their members. For example, US retailers with excess summer stock at the beginning of autumn can hope to find customers in the southern hemisphere at the start of their summer season. Green, who has acquired fashion retailers including Topshop, Miss Selfridge and Dorothy Perkins, will provide excess inventory for MySale in order to impose this new business model. "The truth is that in clothing there are excess goods, and people will welcome this as an alternative platform to sell them. In a way it's back to where I started, buying and selling."

MySale hopes to rival its competition with US retailers offering discounted US brands by introducing new brands to the consumer form Australia, Asia and Europe. Green who now holds 25% stake in the company will be a valuable contributor to offer discounted European brands from his collection. The partnership is Green's largest investment since 2002 when he took over Arcadia, and if the aggressive expansion plan and potential public offering goes as planned perhaps Green will consider more involvement with other listed companies.