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Capital Calls: UK trendy-sofa IPO looks overly plumped up

2 minute read

An armchair with a Union Jack pattern is seen in Bangkok, Thailand, December 12, 2018.

LONDON, May 25 (Reuters Breakingviews) - Concise insights on global finance.

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SOFA STRAIN. Made.com may not get an armchair ride from stock market investors. The online furniture retailer popular with young professionals announced plans on Tuesday to list 25% of its shares on the London Stock Exchange. It wants to sell 100 million pounds worth of new stock. Meanwhile, some existing investors are getting out.

Given its loss-making past, its ambitions look suspiciously well-sprung. The company co-founded in 2010 by lastminute.com (09B.F) entrepreneur Brent Hoberman reckons it can nearly quadruple gross annual sales to 1.2 billion pounds by the end of 2025. That’s based on it taking a chunk of the 504 billion pound global furniture market when it expands beyond Europe in 2023. But muscling in on rivals like $33 billion Wayfair (W.N) will be tricky, and the likes of Germany’s Westwing (WEW.DE) are already competing on its home turf. U.S. online mattress seller Casper Sleep’s (CSPR.N) post-IPO woes show what can happen when hype and reality misalign. Investors may want to haggle over the price. (By Aimee Donnellan)

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