LoveHoney Buys Coco de Mer

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It was announced last week that Love Honey has acquired Coco de Mer.   At first glance this might seem an odd match.  Successful online retailer (and sex toy specialist) buys loss making upmarket High St operation.

Not so, we think.  Coco de Mer is a great brand to have; it might be very flawed commercially but we liked what it was doing and the products it was carrying.  It was always a puzzle as to why the two, West London, stores did so badly. £1.2m in revenue to Feb 2010 and a near half million loss in 2008-9.   Maybe it was too exclusive, too expensive and perhaps the stores were more geared to looking not buying.  Love Honey have a revenue of £13.4 million and a 30% annual growth rate.  They bring a lot of internet expertise and an ability to take Coco to a wider market than Kensington. That was pretty much Richard Longhurst’s view when we spoke to him “ Lovehoney has 10 years of online trading and we've developed a platform, technology and best-practise in-house that we will immediately deploy for Coco De Mer. There's an enormous amount of upside online in the short term.”

Love Honey say that they will keep the two brands separate (which is logical) but there are clearly synergies and overlaps in terms of supply which we think is going to start favouring a wider selection of high quality companies than that offered by traditional ‘adult’ distributors – who are, in any case, facing an uncertain future.  Most of all, Coco de Mer offers unlimited scope in the close to mainstream market which Richard seems to have in mind too:  “Long term the strength of the brand that Sam Roddick has built over the past 10 years has amazing potential for shops and products. It's far too early to say what will happen, but we will continue the amazing work that Sam has done and take Coco de Mer to a global audience.”

Coco might have been a bit of a loss maker but the hard work’s been done making it an aspirational brand.  You could pick up a Coco store and put it in any High Street you like from Richmond to Rome.  It’s part of a £15m company now and with a bit of imagination and a lot more lingerie it could be a mass market Agent Provocateur.