Land of Leather buoyed by investor response
Retailer Land of Leather will be valued at £77.6m (€112.9m) when it lists on the London Stock Exchange next Thursday, it was announced today.
The firm, which has 67 stores in the UK and Ireland, said it had received a positive response from investors, despite previous reports the flotation could value the company at £100m (€145.5m).
Land of Leather said it had bucked the recent downward trend among retailers with same-store sales up 9% in the five months to May 29. Sales had moved higher since then.
The company, based in Northfleet, Kent, is the UK’s second largest retailer of leather sofas by value, behind DFS. Its market value compares with £105 million for rival ScS Upholstery and £220m (€320m) for Homestyle.
Land of Leather does not manufacture its own products and buys around 70% of its goods from the Far East, mainly China.
It plans to nearly double its network to 120 stores within the six years. Most of its outlets are in retail parks.
Plans for future growth also include increasing average selling prices by focusing on fewer promotional ranges, and boosting sales of smaller pieces of furniture such as coffee tables and lamps.
The firm believed growth in the upholstery market would continue to be driven by “relatively stable” consumer confidence.
The flotation marks a £3.2m (€4.7m) windfall for chief executive Paul Briant, who joined his brother Jerry’s business in 1997 when it was known as Softline Supplies.
Paul Briant will also receive £2.2m (€3.2m) in debt owed to him by the firm and will retain a stake worth around £6.4m (€9.3m).
The flotation will also see a group of 14 directors and senior managers who have shares in the business share around £2m (€2.9m) in bonuses.
Land of Leather is currently owned by its management and private equity group SB Capital, which bought out Jerry Briant last year.
During the year to April 3, sales increased to £156.6m (€227.8m) from £101.6m (€147.8m) and underlying earnings rose to £14.4m (€20.9m) from £6m (€8.7m).
In the first two months of its new financial year, sales rose to £29.2m (€42.5m) from £19.9m (€28.9m) in the same period last year.
