Slimma thinking big with flotation

SLIMMA, a manufacturer of clothes for older women of above-average size, is coming to market. The flotation, another management buyout taking advantage of the buoyant stock market, is expected to raise pounds 11.35m, writes Diane Coyle.

Bought from Tootal for pounds 3.3m in 1991, Slimma supplies clothes up to size 34 - six-foot hips - to mail- order firms in Britain and mainland Europe, including GUS, and to retailers including BhS and Littlewoods. Women over a certain size shop by post because they cannot fit into the aisles and changing rooms on the high street, never mind the clothes.

The funds raised by the flotation will be used to pay off the company's remaining debt and redeem preference shares. A net pounds 2.65m will be available to finance future growth.

Stephen Thwaite, chief executive, argues that Slimma's market is expanding. The proportion of the population aged over 45 is rising, and for many women older means fatter. Britain already has nearly 8 million women of size 16 and over.

Slimma also hopes to spread further on the Continent, where the proportion of 'larger ladies' is higher. It currently makes annual sales of about pounds 1m outside Britain.

The company claims to have technical advantages over its competitors, such as lycra panels in skirts that form integral corsets, and catches that allow waistbands to be adjusted after meals.

In the 53 weeks to 1 October, Slimma made pre-tax profits of pounds 1.2m on turnover of pounds 15.2m - both about double the previous year's figures.

The company is placing just over 48 per cent of its equity at a price of 120p, implying a price-earnings ratio of 12.6. Dealings are expected to begin on 7 February.

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