Gymshark Leaps to Unicorn Status

General Atlantic will take a 21% stake in Solihull, England-based Gymshark and said it will support further growth and international expansion.

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British athleisure brand Gymshark Ltd. on Friday, Aug. 14, picked up a £200 million ($261.8 million) growth capital injection from General Atlantic LLC, in a deal valuing the company at more than £1 billion and boosting founder Ben Francis’ aim of taking on global sportswear rivals.

General Atlantic will take a 21% stake in Solihull, England-based Gymshark and said it will support further growth and international expansion. It is particularly aiming to grow the company in North America, where it said Gymshark has already established its largest customer base.
The valuation wins Gymshark the rare distinction of reaching unicorn status without previous support from external investors. Francis, unusually, raises his majority stake in the business to more than 70% from 67%. Just eight years after founding the company in his parents’ garage, and with a personal shareholding of more than £700 million, the former pizza delivery boy and university drop-out has reportedly become the richest self-made Briton under 30 years old.

Francis started out selling bodybuilding supplements. Then he spent £1,000 on a sewing machine and screen printer and taught himself to sew watching videos he made of his mother making clothes. He and co-founder Lewis Morgan expanded the business by selling t-shirts made to order and designing tracksuits and other sports leisure wear.

The company posted £18.4 million of pre-tax profits on sales of £176.1 million in the year to July 2019 and reportedly generated sales of more than £250 million in its most recent financial year. The company has more than 12 million followers on social platforms and is particularly popular with consumers aged between 16 and 24.

It has also been creative in using social media to build its brand during the pandemic. It set up a fund that allowed personal trainers to use Gymshark’s platforms to carry out paid virtual classes and launched a “Sweaty Selfie” campaign, encouraging followers to work up a sweat and donating £5 to the National Health Service for every selfie uploaded.

“I firmly believe Gymshark has the potential to be to the U.K. what Nike is to the U.S. and Adidas is to Germany, and today is a significant step to realizing that,” Francis said in a statement.

Melis Kahya Akar, General Atlantic head of consumer businesses for the Europe, Middle East and Africa region, will take a seat on the board. The company’s CEO is Steven Hewitt, a former regional commercial director of sportswear company Reebok International Ltd. (RBK), according to The Deal’s sister company BoardEx, a relationship mapping service. Local businessman Paul Richardson is executive chairman.

Gymshark was advised by PricewaterhouseCoopers Corporate Finance and Gateley Legal. General Atlantic was advised by RBC Capital Markets and Freshfields Bruckhaus Deringer LLP. The Freshfields team was led by Victoria Sigeti and Julian Pritchard.

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Jonathan Braude
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