WGSN owner to put trends business up for sale
WGSN and Cannes Lions owner Ascential delivered a strong trading update on Wednesday, but also announced the surprise news that its WGSN fashion, beauty and lifestyle trends service is up for sale following a strategic review that it launched last spring.
It has been “evaluating the optimal organisational and capital structure for its businesses to successfully deliver on their strategy and to maximise shareholder value, including an assessment of the merits of a managed separation of certain assets comprising the group”.
The result is that it’s to pursue “a process for the sale of WGSN”. This will “enable the return of a significant proportion of sale proceeds to shareholders” and provide growth capital for all of the group's businesses.
WGSN was sold to the company's predecessor EMAP almost 20 years ago. Founder brothers Julian and the late Marc Worth attracted a price of £140 million for the business they had built from scratch in the late 1990s. It also bought American rival Stylesight 10 years ago for an undisclosed sum that was rumoured to be in the tens of millions of pounds. The two businesses were merged and continue to be the dominant name in fashion trend forecasting.
Other Ascential plans include a separation of its worldwide Digital Commerce assets into an independent, publicly traded company listed in the US, with the Events businesses continuing with a UK listing as Ascential plc.
Current overall Ascential CEO Duncan Painter will become CEO of the listed Digital Commerce business. And Philip Thomas, currently CEO of Ascential Intelligence and Events will become CEO of Ascential plc.
As for trading, it said 2022 saw double-digit revenue growth across all four segments and total revenue for the year ended 31 December is expected to be at least £520 million, up from 2021’s £349 million. Adjusted EBITDA should be at least £118 million, up from £89 million.
Digital Commerce, its fast-growing technologies and services offer helping brands optimise and accelerate their digital commerce performance, saw another year of strong revenue growth, up 15% on a proforma basis and 10% on an organic basis.
Product Design continued its “excellent performance with double-digit revenue growth, driven by record levels of customer retention and the expansion of all product lines”.
And Marketing saw “significant growth with the strong return of the Cannes Lions International Festival of Creativity to Cannes, where revenue exceeded pre-pandemic levels supported by double-digit growth from WARC's subscription business”.
CEO Duncan Painter said: “Ascential has had an excellent end to the year. Digital Commerce's performance in particular, given the challenging backdrop, illustrates the clear competitive advantage we provide to brands trading on the marketplaces, where there remains a rare and significant growth opportunity.
“Product Design delivered another strong performance where its record rate of customer retention is testament to the value it delivers to its customers. While the economic outlook for 2023 remains unclear, our events businesses have demonstrated extremely high levels of customer engagement in 2022, reinforcing their industry leadership and which has translated into strong levels of rebooking for 2023.
“These performances highlight the high-quality businesses within the group and provide clear evidence that each has an attractive, focused investment proposition to deliver significant value for shareholders and customers. Our plan of action will create the best structure for each distinct business to thrive. As the clear world leader in product design trends and insights, WGSN is an outstanding and highly attractive business and well positioned for new, long-term owners to take it through its next chapter of growth.”
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