Flotation puts £20m up for Dabs

Mail-order specialist Dabs Direct plans to raise up to £20m when it floats on the London Stock Exchange before the end of the year.

Mail-order specialist Dabs Direct plans to raise up to £20m when it floats on the London Stock Exchange before the end of the year.

The vendor will also change its name to Dabs.com and will eventually conduct all its business through the web, according to David Atherton, managing director at Dabs Direct.

Atherton claimed it was "the right time" for the company to float and insisted that Dabs was not doing it just for the money because it was offering only the minimum 20 per cent stake. Atherton said that Dabs wanted to take advantage of the market fever surrounding every dotcom company.

"It is easier for a mail-order firm to transfer itself to the web and make a profit because we are used to working on peanut margins and running a cost-effective warehouse model," he said.

"There will also be no problem with demand as the public and small and medium-sized businesses are queuing up to buy over the web."

Since Dabs Direct set up its website just over a year ago, 40 per cent of its business has already taken place over the internet, Atherton said.

Dabs Direct has not given an exact date for the flotation because it still has to undergo strict preparation, he explained.

Atherton added that he expected a number of competitors to follow Dabs Direct and closest rival Jungle.com by choosing to employ a web-only strategy.

He said: "In the next couple of years Dabs Direct will be out of the catalogue game, and if the others want to remain competitive, they will have no choice but to utilise the web."

Dabs Direct also plans to enter the electrical goods market and will sell consumer products such as cameras, televisions and DVD players over the web.