Clothing brand Gymshark becomes Britain’s newest £1bn start-up

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Ben Francis, the 28-year-old founder of gymshark clothing brandhas become one of Britain’s richest entrepreneurs after completing a fundraising round that makes his nine-year-old business the UK’s newest £1billion ‘unicorn’.

Mr Francis founded the sportswear company aged 19 in Birmingham in his parents’ garage. Its headquarters remain nearby in Solihull.

The brand has become a hit with young gym goers. It does not use the traditional combination of advertising and high street shops for promotion, instead relying on the support of a network of athletes and social media “influencers” on Instagram and Facebook.

On Friday, Gymshark raised its first ever external funds, with around £200m invested by US fund manager General Atlantic.

It values ​​the business at more than £1billion and will make Mr Francis, who has a 70 per cent stake, one of the UK’s wealthiest business owners.

General Atlantic will own just over 20%, with the remainder held by partners and senior management of Mr. Francis. Gymshark employs around 500 people.

Gymshark said it was only the second UK company since 2001 to achieve unicorn status without any prior investment.

Mr Francis told the FT the funds would be used to help grow the business in North America, where Gymshark already makes a large proportion of its sales, and in Asia.

The company has already opened an office in Denver.

“We are nothing without our community,” Mr. Francis said, “so we will use this new investment partnership to get even closer to them on a truly global scale. I strongly believe Gymshark has the potential to to be to the UK what Nike is to the US and Adidas is to Germany.

Mr Francis said the company would not change its approach to sales and marketing after the fundraising and that he had always been against rivals’ “old fashioned” approach which focused on setting up place as many products as possible in as many main street stores.

He said these “slow and clumsy” brands hadn’t proved as nimble as Gymshark, which has seen strong sales growth during the pandemic.

At the start of 2020, Gymshark reported its strongest quarter of revenue growth, while in the 12 months to July 2019 revenue grew from £103m to £176m, according to the latest accounts from the company. society. Pre-tax profits fell from £17.5m to £18.4m. According to the company, revenue for the full year to July 2020 was £258m.

Mr Francis said Gymshark had benefited from the popularity of running, cycling and exercising at home during the lockdown.

He set up a fund that allowed personal trainers to use his platforms to run paid virtual classes during the pandemic and launched an ‘NHS Sweaty Selfie’ to raise money for the NHS in Birmingham.

Mr Francis said he had higher offers from other private equity firms, but General Atlantic seemed the best fit. Melis Kahya Akar, consumer manager for the Emea region at General Atlantic, will serve on Gymshark’s board of directors.

Gabriel Caillaux, head of General Atlantic’s activities in the Emea zone, described Gymshark as an “authentic, disruptive and differentiated” brand.

He added: “In a context of increasing use of social media, rapid growth in e-commerce and increasing attention to health and well-being, Gymshark is well positioned to seize the opportunity for growth. additional.”

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