Bath-based Lovehoney is poised to become the world’s largest adult toy business by merging with a German retailer of premium sexual wellness products.
The link-up with WOW Tech Group will create a global business worth €1bn (£850m) and combine some of the industry’s largest brands.
The move comes 19 years after Lovehoney was launched in Bath – appropriately from a bedroom.
Founders Richard Longhurst and Neal Slateford, pictured below, saw a gap in the market for selling high-quality adult pleasure products online and put in £9,000 into the venture.
Since then Lovehoney has developed into an erotic empire, designing ans selling more than 150 products, growing a 300-strong team based in Bath and across the UK, US and Australia and serving a 2.2m global customer base.
Over the past six years overseas sales have grown by 365% to £56m and its percentage of sales exported has risen from 27% to 45%. Its success in overseas markets has earned it two Queen’s Award for International Trade.
The newly merged group, which will go under the Lovehoney name, will also include Amorana, the Swiss sexual well-being retailer acquired by Lovehoney last September.
It will have operations across the world and more than 730 employees with a broad spectrum of talent across engineering, industrial design, sales, and marketing. Its brands will include Fifty Shades of Grey, Happy Rabbit, Womanizer, We-Vibe, and Arcwave.
Financial terms of the merger have not been disclosed.
Richard Longhurst and Neal Slateford will retain minority stakes in the enlarged business and sit on its board of directors.
Swiss private equity firm Telemos Capita, which bought a majority stake in Lovehoney from Richard and Neal in 2018, will be the majority shareholder in the merged group.
The group will be led by WOW Tech CEO Johannes Plettenberg. In 2017 Johannes and a group of investors acquired US sex toy brand Womanizer and the following year merged it with Canadian brand We-Vibe to form WOW Tech Group.
Johannes said: “Sexual wellbeing products have gained a mainstream position in today’s market, supported by liberalisation, acceptance of sexual awareness, and the influence of popular culture.
“Amorana, Lovehoney and WOW Tech share the same mission to destigmatise sexuality, empower people to enjoy a fulfilling love life, and experience sexual happiness.
“Combined, Lovehoney Group will provide a specialist e-commerce platform with unmatched international reach, with the creator of the most well-known and innovative brands in the industry.”
Telemos Capital chief investment officers Philippe Jacobs and Jacob Polny added: “Lovehoney and WOW Tech will bring together a unique proposition for both business and individual customers, providing best-in-industry service and innovative products in more countries than ever.
“This sector is rapidly mainstreaming with the sexual wellbeing category now offered by high-street retailers. We foresee consumer demand accelerating around the world, and with the Lovehoney Group, we will continue to innovate and progress the whole sexual wellbeing market.”
The global sexual wellbeing market is projected to grow at an annual rate of 8% from 2021 to 2028, when it is expected to be worth $52bn.
