THE BUSINESS Growth Fund has put its best foot forward with a £3.5m injection into women’s fashion shoe brand Moda in Pelle, bringing its total investments in fast-growing Yorkshire companies to £40m in just over two years.
The company will use the funding to open new footwear stores, refurbish existing ones and develop its website and other e-commerce channels.
Judith Pilkington, the former chief executive of luxury beauty product firm SpaceNK, has been brought in as non-executive chairman.
She will work alongside new CEO David Inglis, a multi-channel specialist and former senior executive at Asda, and Stephen Buck, who founded the business in Leeds in 1975.
Mr Buck and wife Claire remain majority shareholders of the company, which has nearly 60 stores and concessions across the UK.
The deal announced today is the seventh to be completed by BGF in Yorkshire since June 2012.
The £2.5bn fund was established in 2011 to help cash-starved small and medium-sized businesses with growth potential.
It is backed by five of Britain’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered.
Richard Taylor, BGF investment director in Yorkshire, told The Yorkshire Post: “We are busy across the North but certainly have been busier on this side of the Pennines this year.
“As a region we are probably punching above our weight and long may that continue.”
He said the fund has a strong pipeline of deals with Yorkshire entrepreneurs positive about their prospects and looking at taking on new investment.
Mr Taylor said management teams who had their “heads turned” by potential stock market flotations earlier this year are now considering other ways to raise finance.
“We are looking to pick up opportunities on the back of that,” he added.
BGF’s maiden deal in Yorkshire was a £4.4m investment in Springfield Healthcare Group in June 2012. It followed up with investments in York Mailing, Xercise4Less, VTL Group, Nationwide Window Cleaning and the Horbury Group.
Mr Taylor said the Moda in Pelle deal was “a good opportunity” as an established company with a loyal customer base.
He added: “The business was looking for funding to accelerate its stores and concessions and also build on its fast-growing online offering.”
BGF’s due diligence of Moda in Pelle included the company’s administration in 2006; “it was overleveraged at the time,” said Mr Taylor.
Mr Inglis, who started as chief executive yesterday, has been advising the company for the last year. Sales will hit £20m this year.
He told The Yorkshire Post: “I found a business that had a great product but did not have the cash to make the brand around it grow in the way it should be.”
Moda in Pelle sources shoes from manufacturers in Italy, Spain, Portugal, Brazil and China.
Mr Buck, 56, said: “Over the past 40 years, we’ve created a tremendous amount of brand capital among a loyal customer base by focusing on quality design and manufacturing.
“After a particularly strong period of growth, we want to pursue new opportunities to fully exploit the brand’s potential.
“David has an acute understanding of what we want to achieve, and brings with him energy, determination and strong background in the retail sector. I’m delighted that he will be joining the team.”
Buck family tradition
Stephen Buck followed his father’s footsteps into the shoe trade.
Joe Buck set up a shoe factory in Leeds in the 1950s before moving into retail after his biggest customer went bust.
Stephen’s younger brother Daniel Buck is the founder of Daniel Footwear, which was the first UK stockist of Jimmy Choo.
Joe Buck recently celebrated his 91st birthday.
Sentio Partners provided financial advice to Moda in Pelle on the Business Growth Fund deal.
Addleshaw Goddard provided legal advice and Freeths provided tax advice.
Pinsent Masons and PwC advised BGF.