Lingerie firm takes on M&S

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The Independent Online
THE Alternative Investment Market is set to gain its first national retailer, in the shape of lingerie and nightwear specialist La Senza.

The company plans to roll itself out as a premium brand, a notch above Marks & Spencer, which dominates the UK lingerie market, worth nearly pounds 1.5bn.

It will be one of the first new retailing concepts to come to market since the 1980s, when the likes of Next, Sock Shop and Tie Rack enriched, and in many cases subsequently impoverished, investors.

La Senza hopes to raise more than pounds 15m through a placing to fund expansion to more than 100 UK outlets over the next few years from the 22 it has now. The concept was developed by retailing concern Suzy Shier, a Canadian company quoted on the Montreal and Toronto stock exchanges. It launched La Senza shops in Canada in 1990 and the first six in UK, boasting a distinctive Art Deco styling, at the end of 1994.

Suzy Shier is expected to retain a majority stake in the business after the flotation, which is due in May.

The company says it has already achieved sales per square foot of pounds 511 a year - just below Marks & Spencer. Towns where it already has stores include Nottingham, Cambridge, Thurrock and Milton Keynes.

Knickerbox occupies a similar niche, but Laurence Lewin, a senior manager with Suzy Shier who set up La Senza in the UK, says the two are different. Knickerbox, a kiosk operation, concentrates on bras and knickers, whereas La Senza takes in a wider range of fashion items. Its stores are also substantially bigger, at up to 2,300 square feet.

He attributes the initial success of the business to style and focus: "There is a strong fashion content to our designs, which is not what buyers go to the main store groups for."

All the merchandise is designed by La Senza, which caters to a wide age range, although most of its customers are aged 18 to 35.

Marks & Spencer, which dominates the UK women's underwear market with a 32 per cent share, has broadened its designs, and turned to sexier ranges to increase sales. At the other extreme, Ann Summers sex shops specialise in risque lingerie, but there has been no news of late of any further expansion.

However, competition in the sector could hot up. Stephen Hinchliffe's Facia group bought the Contessa chain of women's lingerie shops from Courtaulds Textiles a year ago. The 130 shops were targeted at women over 35, but Hinchliffe promised to redesign the ranges and widen its appeal.

Victoria's Secret, the upmarket US lingerie chain and catalogue operation, is also known to be considering entering the UK market.

Clive Vaughan, of the market research group Verdict, approves of La Senza's aims: "It seems to be a stylish, different brand, and our belief is that it will be a success."

La Senza is listing its shares on AIM because it lacks the five- year track record needed to list on the main market. It made sales of more than pounds 10m in the year ending 3 February, 1996. Mr Lewin says it should reach break even by the end of this year.