// Mahabis rescued from administration by Simba Sleep co-founder
// James Cox instated as interim CEO as Mahabis co-founder steps down
// All staff and supplier relationships retained as a result of acquisition
Specialist online retailer Mahabis has been rescued from administration after an investment firm headed up a Simba Sleep founder acquired it.
YYX Capital – the investment boutique co-headed by James Cox, who co-founded online mattress retailer Simba Sleep – has completed the acquisition of the assets of Mahabis, taking the upmarket footwear business out of administration.
The acquisition, agreed with administrators KRE Corporate Recovery, means that all 16 members of Mahabis’ staff will be retained, and supplier relationships will be maintained.
The deal also means Cox will become interim chief executive of Mahabis, and YYX Capital will invest in developing the footwear brand’s ecommerce, marketing, communications and online and offline retail channels.
Mahabis, which was launched in 2014 and is known for its premium slippers that can be worn outside, had initially called in the administrators on December 27.
Mahabis was founded by Ankur Shah and positioned itself as “the Nike of downtime”.
It was thought to be valued at as much as £100 million, but for the 12 months to 2017 Mahabis reportedly owed £2.6 million to creditors – a stark increase from £927,000 in the previous year.
However, Cox said that in the 2016/17 year, Mahabis achieved around £25 million in sales and recorded operating earnings of £2.5 million.
“Ankur Shah and his team have built a great business in Mahabis which unfortunately just stumbled at a critical point,” Cox said.
“It has an established brand name and good customer recognition having already sold nearly a million pairs of its iconic design footwear in over 100 countries in just over four years.
“Mahabis has never raised any external capital, so with the right backing, we believe we can further grow Mahabis globally, and at speed.
“Its high margin product category with a large addressable market, both online and offline, and presents exactly the kind of value YYX are looking for.”
He added: “Using the full force of the YYX team, including the addition of a well-recognised creative director, with a strong track record in the sector to further curate the product range, it is our aim to quickly take Mahabis back to these levels and beyond.
“By improving the sales mix and gross margin we want to build a £100 million business, with at least 15 per cent EBITDA, within five years.
“YYX Capital will use the team’s expertise that helped develop the likes of Simba, Zoopla, Just Eat, Match.com and others to realise Mahabis’ global potential.”
KRE Corporate Recovery said it received over 70 expressions of interest in buying Mahabis after it went into administration.
Shah will no longer be involved with the business he founded, but he lent his support to the new owners.
“Whilst the decision to go in to administration was a difficult one, this was a great outcome for both employees and suppliers,” he said.
“Whilst I now plan to pursue other projects, I hope YYX can propel the brand in new and exciting directions.”