Music Magpie Backer To Cash In On Stake – Sky News

Posted by Google News | Industry News | lunes 29 julio 2013 2:57 am

One of the backers of the online retailer Music Magpie is mulling the sale of its stake just two-and-a-half years after investing in the fast-growing site.

Sky News understands that LDC, the private equity arm of Lloyds Banking Group, has appointed accountancy firm Deloitte to evaluate options for its minority shareholding in Entertainment Magpie.

A prolific advertiser on UK television, Music Magpie was set up in 2007 as a place where consumers could send their unwanted CDs in return for a small cash payment.

Since then, it has acted as a catalyst for coalescing one of the most fragmented markets in retailing, one that was principally  populated by car boot sales and independent shops.

The parent company now buys and sells second-hand clothes, DVDs and computer games, as well as electrical devices and appliances and is growing so rapidly that it expected to reach £100m of annual revenue in its last financial year.

It is understood that LDC has yet to formally decide whether to sell its stake in the Cheshire-based company, but the appointment of Deloitte indicates that some form of transaction is likely.

Entertainment Magpie, which is chaired by Allan Leighton, the former boss of Asda and ex-chairman of Royal Mail, has a physical presence on some high streets as a vehicle for shifting stock.

LDC is thought to have paid £10m for its stake in the company in 2011.

Entertainment Magpie has benefited from the tough UK economy by offering immediate cash payments to consumers who might otherwise struggle to offload unwanted items.

Its service has won plaudits from users, who are able to bundle all of their goods into one box rather than having to make separate deliveries for each category of product.

However, some people familiar with the company are sceptical about its prospects because of the growing propensity of consumers to download music and films digitally rather than buy CDs and DVDs.

That has not prevented Entertainment Magpie expanding internationally, with plans for a major warehouse facility in the US announced last year.

LDC and Deloitte declined to comment.

Source Article from http://news.sky.com/story/1121500/music-magpie-backer-to-cash-in-on-stake



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