Following the news that In The Style is to be sold to private equity firm Baaj Capital for GBP1.2m, GlobalData, Just Style’s parent company, pointed out that the online retailer’s waning relevance within the challenging online fast fashion market will continue to hold it back despite a new owner.

Chloe Collins, head of Apparel at GlobalData, said this move comes as “no surprise.”

“In The Style’s share price has tanked since its IPO in March 2021 and in H1 FY2022/23 its adjusted EBITDA swung to a loss of GBP1.8m. The retailer experienced a serious slowdown in revenue in 2022, as consumers returned to instore shopping and shifted away from fast fashion in favour of better quality, more versatile clothing to reduce cost per wear and benefit both the environment and their wallets amid the rising cost of living. Rivals like the Boohoo Group and ASOS also saw sales step back, though remained more resilient than In The Style, as the latter’s failure mainly lies in its waning relevance.

“The online retailer initially rose to success as one of the first retailers to fully embrace the power of influencers, and its collaborations were its USP, but now that its competitors have latched onto this marketing tool, In The Style fails to stand out. The influencers that it partners with also cannot compete with the big names that the likes of boohoo and Shein work with. Its price points are much higher too, which will be a disadvantage in 2023 as consumer spend remains tight. Therefore, a new owner may not be enough to revive its fortunes.”

Jim Sharp, chair of In The Style, commented: “Following a thorough review of different strategic options with our advisers and interactions with numerous parties, the Independent Directors have unanimously concluded that it is in the best interests of the Company, its shareholders and its stakeholders to sell In The Style Fashion Limited to Bidco.

“The Independent Directors therefore believe that under the new ownership structure – with Adam’s continued leadership and Baaj’s backing – the In The Style brand can continue to build on its potential whilst protecting the interests of the Group’s employees, suppliers and other stakeholders.”

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Last December, while announcing its interim results for the six months ended 30 September 2022, In The Style made it clear that its strategic review “may or may not” result in a sale of the company or some of group’s business and assets.