Mahabis rescued after slipping into the red

The company did not give any reason for its crisis. However, its accounts show it owed £2.6million in 2018 (Photo: Mahabis).
The company did not give any reason for its crisis. However, its accounts show it owed £2.6million in 2018 (Photo: Mahabis).

The self-styled “world’s favourite slipper company” has been rescued from administration. YYX Capital is thought to have paid between two million and three million euros to buy Mahabis, the online slipper start-up that failed after it ran out of cash.

YYX is backed by James Cox, who co-founded Simba Sleep, the mattress company, as well as other investors. Cox has agreed to take on the role of interim chief executive of Mahabis.

As part of the deal agreed with KRE Corporate Recovery, the administrator, all 15 employees at Mahabis will be retained and supplier relationships will be maintained.

Mahabis was founded in 2014 by former barrister Ankur Shah, who dreamt of designing the “world’s favourite slipper”.

The company advertised its products on Facebook, Instagram and on the London Underground and gained a cult following for slippers retailing at £69 a pair. In 2016-17, it generated about £2.5 million earnings on £25 million of revenue.

YYX Capital was established last year by a group of investors including Cox, Sir John Hegarty, a founding partner of Saatchi & Saatchi, and Michael Jackson, former chairman of Sage. It was set up with the aim of co-investing with family offices — the term for family-controlled investment vehicles — and individuals in consumer internet, e-commerce and software start-ups.

Mr Cox said that YYX Capital would invest in developing the Mahabis brand and would lend its expertise in marketing, e-commerce, online and offline retail channels and communications to “build the business into a truly global premium lifestyle brand”. It wants to expand the company’s range of footwear and to start to sell Mahabis on the high street.

“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 designer footwear in more than 100 countries in just over four years.

YYX Capital said that it planned to appoint a creative director to “further curate the range” and that it hoped to build a £100 million business, with at least 15 per cent earnings before interest, tax and other charges within five years.

Shah, who is leaving the business, said: “We achieved an enormous amount in a very short space of time. While the decision to go into administration was a difficult one, this was a great outcome for both employees and suppliers.” He said that he planned to pursue other projects.