Shares in MySale jumped on Wednesday after the founders of the fashion brand clearance website pledged to buy £3m in shares in response to a profits warning this week that hit well-known shareholders including Sir Philip Green.
MySale’s chief executive, Carl Jackson, who with his brother Jamesalready controls a 34.8% stake, said he was considering the purchase of shares equivalent to nearly 3% of the UK-listed company.
Under City rules, the extent of Jackson’s holding means that he will need the support of shareholders carrying a stake worth 50% of the company or more to avoid being forced to make a full bid for it.
Green, whose family controls a 22.5% stake, said he would support Jackson’s plan. “If people stand up and are willing to go into the market and buy shares I think that’s a good signal,” he said.
Green and his fellow fashion retail tycoon Mike Ashley were both left nursing multimillion-pound paper losses after close to £140m was wiped off MySale’s value on Monday. Shares tumbled 53% to 81.5p after the company said pre-tax profits would be “materially below market expectations” because of challenging trading conditions in its home markets of Australia and New Zealand.
The Green family’s Shelton Capital fund invested in MySale before its initial public offering in June and held on to a 22.5% stake. This week’s profit alert wiped £30m off the value of the holding, leaving it worth only £27m when the market closed. Ashley’s Sports Direct took a near 5% stake in June as a route to establishing a retail presence in the antipodean markets.
The profit alert was the second major issue MySale has faced. Its debut on the junior market got off to a rocky start after a pricing error saw its shares priced in pounds not pence, accidentally triggering a sell-off on its opening day. The company floated at 226p but stood at just 69p on Wednesday afternoon.
“We still have confidence in them. Nothing has changed. Dozens of companies have a misstep before going forward,” Green said, adding that was not planning to put a representative on the board.
The Jacksons founded MySale in Sydney in 2007, giving retailers a second chance to dispose of unsold stock.
