MySale raising £10m as it focuses on 'leaner' Australasian operation
Online retail company MySale announced the outcome of its strategic review and a proposed placing on Tuesday, to be executed by way of an accelerated bookbuild to raise a minimum of £10m before expenses, via a conditional placing of new ordinary shares at a price of 2p each.
The AIM-traded firm said the placing would enable the repayment of its bank debt, meaning it would operate on a debt-free basis, and was expected to deliver positive cash flow.
It said the placing would also support the acceleration of its 'ANZ First' strategy, transitioning the group into an Australia and New Zealand-focussed retail marketplace platform, providing a “compelling” sales channel for domestic and international brands.
Shareholders representing about 79% of the issued share capital of the company had demonstrated their support for the placing, the board reported, by undertaking to vote their shares in favour of the resolution to approve the placing at the general meeting.
MySale said the transition would involve the continued sell down of nearly all of its 'ownbuy' stock, removing the requirement for that working capital to be tied up in inventory.
It would also see a “significantly reduced” cost-base as a result of restructuring the supply chain, reducing headcount, leveraging the benefits from the investment in the technology platform and operating in a more efficient manner.
The group said it would continue to build on the “flexible and scalable” proprietary technology platform, and its user-focussed innovation, such as the existing 'buy-now, pay-later' OurPay product, and its margin-enhancing marketing services offering.
It would also continue to leverage the counter-seasonal opportunity that provided a unique solution for international brands to access the group's customer base in Australia and New Zealand, and southeast Asia.
MySale said it had agreed a strategic marketplace partnership with an unnamed “leading” European online luxury fashion retailer, adding that it remained in discussions with further domestic and international retailers.
The company said it would strengthen its board with the appointment of three new additional non-executive and executive directors, including a chief financial officer.
“During the last 12 months the MySale business has contended with a series of significant challenges, particularly in its core Australian market,” said chief executive officer Carl Jackson.
“Following the recent period of restructuring and the proposed placing, I am confident that MySale will emerge as a leaner business, focussed on delivering value via the 'ANZ First' strategy, with a unique marketplace platform providing a compelling counter seasonal and clearance solution for domestic and international retailers.
“Our focus is now on accelerating the transition to a marketplace platform, by exiting the majority of our online inventory and operating an inventory-light model.”