Lovehoney, the Bath-based sex toy retailer, is predicting a new phase of strong growth following the sale of a majority stake in the business by its co-founders.
Richard Longhurst and Neal Slateford, pictured, who launched Lovehoney by selling sex toys online from – appropriately – a bedroom in 2002, will continue to lead day-to-day operations. Financial details of the investment by Swiss-based private equity firm Telemos Capital – its first in the UK – have not been disclosed.
Lovehoney, which employs more than 200 staff at its Bath HQ and distribution site and sells a range of own label and third-party products, had revenues of around £100m in the year ended March 31, with overseas sales soaring by 47%.
Over the past three years it has enjoyed compound annual sales growth of around 30%.
Neal and Richard said proceeds from the sale will allow them to invest in new technology and marketing, allowing the business to raise its profile in new countries, and to continue to evolve its customer service, online content, community and innovative new products.
The partnership with Telemos, set up last year by a member of Switzerland’s wealthy Jacobs family, illustrates the achievements of the Lovehoney management team which has consistently challenged the market while delivering innovative, high-quality products and exceptional top-line growth.
Two years ago Lovehoney’s overseas sales success led to it becoming possibly the most unusual winner of a Queen’s Award for International Trade.
At that time it had only been exporting in a serious way for around three years ago after opening sites in the US and Australia to sell its sex toys, lingerie, erotic gifts and other adult products. It has since spiced up the love lives of the French and Germans with country-specific sites.
Overseas markets now account for around 40% of sales.
Neal Slateford said: “We’re excited to be partnering with Telemos as we continue our strategy to grow Lovehoney into the world’s leading sexual happiness retailer. This investment shows the strength of online retail and will allow us to break into new markets globally.”
Richard Longhurst added: “This is the culmination of 16 years of hard work by our brilliant teams in Bath and our offices worldwide. It has been a phenomenal journey for Neal and I and we’re beyond excited at our future plans for Lovehoney.”
They have been joined on the Lovehoney board by Telemos executive chairman Philippe Jacobs and its chief investment officer Jacob Polny.
Philippe Jacobs said: “We are delighted to have made this investment which demonstrates our differentiated thinking and approach. Richard and Neal have created a great company. We are excited to partner with founders with long-term growth aspirations and a desire for a flexible and nimble investor.”
Jacob Polny added: “We were attracted to Lovehoney’s category leadership, the strong own brand portfolio and the combination of customer service, community and content that truly differentiates the proposition.
“We look forward to working with Lovehoney’s founders and management team to grow the business in the UK and internationally in the years to come.”
He said with the backing of Telemos, Lovehoney will accelerate its plans for international expansion, tapping into fragmented and underdeveloped markets and building on its strong consumer engagement.
