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Ex-Matalan chief joins Hut Group's board ahead of flotation

The Hut Group, the UK's fast-growing online retailer, has raised £14m to prepare for a flotation next year in a move that marks the return to retailing of Angus Monro, the former Matalan chief executive.

Mr Monro will join the board and has also invested in the company, along with fund managers Artemis and William Currie, and Balderton Capital, the technology venture capital group.

The new shareholders have taken a 43 per cent stake, valuing the retailer at £32m. Iain McDonald of William Currie and Mark Evans of Balderton Capital will join Mr Monro as non-executive directors.

The investment will finance acquisitions of online retailers and help Hut Group diversify its products beyond home entertainment, sportswear, perfumes and lingerie.

The Northwich-based retailer, founded by Matthew Moulding and John Gallemore in 2004, shot to prominence when it bought the online brand of Zavvi a year ago when the retailer fell into administration.

Mr Monro, who began his career at Marks and Spencer, was chief executive of Matalan until 2001 but has not been active since leaving Instore, the parent of Poundstretcher, in 2006.

Besides running TheHut.com and Zavvi.com, Hut Group also provides e-commerce platforms to some of the UK's leading retailers, including Asda, Tesco and Argos.

Matthew Moulding, Hut Group chief executive , said: "We are delighted to have completed such a fundraising, where we have asked major financial institutions to step outside the norm of publicly-listed companies and invest in a private company in advance of a flotation."

Mike Fletcher, managing director at Altium, which advised Hut Group, said: "In the space of eight weeks, the Hut Group has completed a unique deal, achieving an attractive valuation and raising a significant amount of money in advance of its planned admission to Aim in 2011."

Hut Group made pre-tax profit of £403,504 on turn-over of £24m in the year to December 31 2008, the first of consolidated trading.

Investors will watch closely its efforts at diversification. It has an advantage over traditional retailers because it dispatches CDs and DVDs from a centre in the Channel Islands which, being outside the EU, charge no VAT.

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