Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Footasylum: The nightmare investment that has been a nice little earner for founder's kids

Investors buying at the IPO price of 164p have lost more than three-quarters of their investment so far but the kids of Footasylum founder David Makin have pocketed millions
adidas trainers
Footasylum sells trendy trainers and trackies

Footasylum PLC’s (LON:FOOT) recent woes might have made the trendy ‘athleisure’ retailer a nightmare investment for some but for the founder’s children, it has been a nice little earner.

For David Makin’s three kids – one of whom is Clare Nesbitt, the company’s chief executive – have pocketed just shy of £25mln from the troubled group’s initial public offering last November.

On top of that, they still have a combined 57% stake in Footasylum worth just over £20mln. Granted, that figure would have been significantly higher just a few months back.

READ: Footasylum - is the runaway trainer ever coming back?

Shortly after it joined AIM, the stock was changing hands for more than 265p. Ten months and two profit warnings later and the share price has collapsed to 34p.

That slump has left a lot of investors well out of pocket. Those who bought in at the 164p stock market float price have seen 80% wiped from the value of their investment, while those unlucky enough to buy shares at December’s peak have lost the best part of 90%.

Nursing those sort of stock market-inflicted bruises, rank and file punters could be forgiven for being more than a little envious of the Makins’ good fortune.

Their windfall hasn’t come from their father David as you might expect. It actually comes from their dad’s business partner and close friend, John Wardle, with whom Makin senior founded JD Sports Fashion PLC (LON:JD.) back in 1981.

Wardle, estimated to be worth £50mln, is now 74 and has no children of his own to leave his millions to. Instead, some of his wealth is going to Clare, 31, and her two siblings, 28-year-old Tom, who is the company’s marketing and e-commerce director, and Amy, 30.

That’s because the former Manchester City chairman set up a trust via which he gifted them 44.5mln Footasylum shares, which at one point had a value of over £100mln.

READ: JD founders set for big payday as Footasylum plans AIM float

Some of those shares, worth around £14mln, were sold at the IPO last November, while the remaining stock is valued at £12.3mln.

They and Makin senior received a further £18.7mln when the company bought back preference shares that had previously been given to Wardle in payment of a loan.

At the same time, Makin gave his kids 22.5% of Footasylum’s stock, now worth £8mln, when he set the company up in 2005 and means they control 57% of the shares.

Their total stake is now worth £20.3mln, although as recently as June the shares could have fetched £120mln on the open market.

View full FOOT profile View Profile

Footasylum PLC Timeline

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use