Heal's to raise pounds 12m in float

Heal's, the upmarket home furnishings retailer, will raise pounds 12m from its stock market flotation later this month, though it will only receive pounds 1.75m of new money.

Around pounds 8m of the funds will go to repay in full the investment of NatWest Ventures, while five managers led by Colin Pilgrim, chief executive of Heal's, are selling shares worth pounds 1.5m. Mr Pilgrim led the management buyout of Heal's from Storehouse in 1990.

Heal's pathfinder prospectus, published yesterday, showed that the retailer achieved operating profits of pounds 1.5m in the 20 weeks to 1 February. Like- for-like sales were 16 per cent ahead of the same period last year with the winter sale the most successful since the management buyout.

Full-year profits last year were pounds 1.8m on sales of pounds 19.4m. Heal's has three stores, on London's Tottenham Court Road and King's Road, and in Guildford, Surrey. The company plans to use the float proceeds to invest in its existing stores and develop a larger portfolio.

Customer footfall has increased by 26 per cent since 1991 to 1 million. Sales per square foot have increased by 52 per cent to pounds 354.

Heal's plans to develop more stores in affluent shopping areas of Britain, focusing on metropolitan centres such as Glasgow, Dublin and Manchester. It will also open slightly smaller branches of 12,000 square feet in provincial towns. The company declined to give a time-scale of possible openings.

Heals' was founded in 1810 and has operated from its current Tottenham Court Road site since 1840. It was acquired by Habitat in 1983. The Guildford store opened in 1971 and the King's Road branch in 1995. The group has a distribution centre in Edmonton with adjacent workshops for the manufacture of Heal's beds, still one of the group's best selling lines.