Direct-to-consumer slipper brand Mahabis has been rescued from administration by one of the founders of mattress start-up Simba Sleep and his boutique investment firm, who says it has the potential to become “the next Ugg”.
The acquisition by YYX Capital safeguards the jobs of all 16 employees at the company. James Cox, Simba co-founder and co-head of YYX, will take over as interim CEO of Mahabis during the handover period and oversee a plan to overhaul its product and marketing.
Mahabis was founded in 2014 and grew rapidly by targeting millennials with luxury woollen slippers that can be worn outside using detachable rubber soles. It sold almost a million pairs in just four years.
The business went into administration in late December last year, putting the future of the business in doubt. However Cox said there was still value in the brand and potential for it to become a £100 million business in five years. “There’s no reason Mahabis can’t be like Ugg,” he said.
He added that he will partner with retailers to make Mahabis footwear available in a range of channels, including bricks-and-mortar stores.
Thus far the business had operated on a direct-to-consumer model though it did have a tie-up with US department store Nordstrom as part of its plan to break the US market. TheIndustry.fashion understands that the previous model, which was based on acquiring customers via paid social media, had proved too costly.
The brand is also planning a tie-up with Simba Sleep to produce exclusive co-branded slippers.
Administrators for the business at KRE Corporate Recovery received more than 70 expressions of interest in buying the business, which had ambitions to extend into loungewear and capitalise on the working at home movement. Staff at the business were offered flexible working conditions and encouraged to spend some of the week working at home.
Paul Ellison, partner of KRE Corporate Recovery, said: “James Cox and YYX Capital showed a real understanding of the business and had a very clear strategy on how to grow Mahabis while retaining its core team and unique corporate culture.”
Mahabis founder Ankur Shah will no longer be involved with the business, but he lent his support to the new owners. He said: “We achieved an enormous amount in a very short space of time. Whilst the decision to go in to administration was a difficult one, this was a great outcome for both employees and suppliers. Whilst I now plan to pursue other projects, I hope YYX can propel the brand in new and exciting directions.”
Images: Press Association