If ever there was an online company that we thought would have found its way to the stock market by now, it's the Hut Group.
Groomed to the point you can almost smell the deodorant and cosmetics it sells through its various sites, its board and shareholder register looks like a veritable 'Who's Who?' of retail from the past decade.
Will this be the year it finally makes the cut? We think it is.
But let's first recap on our series to date. A growing number of online retailers are shuffling into the queue for a possible London Stock Exchange listing or refinancing of their businesses as the British obsession with online shopping reaches fever pitch.
It also feels like a window has opened to the investment markets that means now could well be the time for good businesses with growth prospects to cash in.
Of those we plan to analyse, we see a number that are very strong candidates for finding new investors - and then others which, from the outside at least, we struggle with.
Short of stockbrokers or advisers to cook the figures for us we decided to do some number crunching ourselves. Last week we studied the virtues of fashion upstart Boohoo.com and prior to that appliances giant AO.com. Our verdict: two clear stars of the sector.
But the performance of the Hut has seemed patchy over recent years and we had begun to worry it had become a triumph of acquisition over trading performance.
We think it there is considerable opportunity for the group but we think it has work to do proving that and defining exactly what its strategy will be.
Clearly, the firm has moved from its high volume-low margin model of old (it used to fulfil online CD orders for supermarkets) to a more branded, semi-luxury model over the past three years.
After speaking to people in the industry and running the numbers we think it likely The Hut Group will approach if not exceed sales of £200 million in the year to December. That compares to a projected IPO value of £250 million.
Given it was beginning to show all the signs of a company losing its way a year or two ago that is impressive.
One of the main problems we have had with the Hut is that its strategy at one point seemed to stem from growth through acquisition. Fine on one level, but that puts you on the same footing as any other investment firm rather than the online whiz the business is often presented to be.
For example (and please bear with us here as we prove our point!) the acquisition of myprotein.com was announced in June 2011 for an estimated £60 million.
Myprotein's parent Cend Limited had made £16.3 million sales in 2010 when founder Oliver Cookson decided to sell up (he stayed at the Hut for a time but left late last year under something of a cloud). At the time it was estimated that would make £25 million in 2011. In fact it made £30.8 million in 2011 and £41.9 million in 2012.
We reckon the acquisitions of Mankind Direct (in December 2010 for an estimated £2.5 million) and Lookfantastic.com Limited (in November 2010 for £19.6) also added £25 million or more to sales in 2011 during The Hut's acquisition spree - the vast majority of that coming from Lookfasntastic.com. But sales at those two businesses combined rose to about £27 million in 2012.
By the end of 2012, therefore, those three business had added almost £70 million to sales.
The Hut Group's total sales in 2010 were £84 million rising 69 per cent to £142.4 million in 2011 and then another 10.4 per cent to £157.2 million in 2012.
Crudely speaking, the business would have reached £154 million just from the three new acquisitions.
We don't want to take anything from The Hut. We are sure its much vaunted 'black box' skills and proprietary technology work wonders for companies. But the scope for growth in all its acquisitions was fairly represented in the price - £60 million for Myprotein which saw rapid growth and £19.6 million for lookfantastic.com, which did not, and £2.5 million for the small Mankind Direct business.
Given that it was planning a stock market listing in late 2011 it seems reasonable to assume the numbers it was presenting would strive to illustrate the potential of acquired businesses rather than growth from existing ones.
Looking back it was clearly too early to be floating the business (although we have seen other business go to the market on the strength of, what later turned out to be, acquisitions - and succeed. Investors often don't ask too many questions when there are dollar signs in their eyes!).
But even overall growth in 2012 turned out to be pretty flat. In fact, in online terms, below the market rate.
But our conclusion is a positive one for The Hut. We think its core sites and some of its add-on sites launched to compliment acquisitions are doing a little better and this was born out in figures released in October showing a 30 per cent increase in first half revenue to £77.1 million.
Now that's the kind of growth we expect to see from an online winner. We hope we are right and there is substance to that growth. It also made its first ever pre-tax profit last year - always a cause for optimism.
Meanwhile, there are other issues to resolve. We understand that it is trying to patch together a 'good-better-best' product strategy by adding sites like upmarket womenswear site Coggle.com in the first half of this year. We also see that there is a broad fashion, beauty and lifestyle element to the offer - health and diet supplements, beauty, and fashion go hand in hand in many parts of the country these days.
That shouldn't be too difficult to explain to pension fund managers.
We do wonder, however, if The Hut might be a little 'top heavy' with too many senior names hovering in the background. Former Morrisons finance director Richard Pennycook is chairman and former Matalan chief executive Angus Monro is former chairman and now a non-executive.
We think these two are great hires and no doubt open doors and provide a cleat route into the City.
But former Tesco boss Terry Leahy's mooted involvement we think was excessive, particularly with the troubles Tesco is now having, and other shareholders Sir Stuart Rose, formerly chief executive and chairman at Marks & Spencer, and Terry Green, who held the same position at Debenhams and ended up running Tesco's clothing business, we hope will be happy to stay in the background.
Other than that we think The Hut chief executive Matt Moulding, who still has a 17 per cent holding, is a clever bloke who has made some good appointments in the ranks recently. We think, for the most part, he just about manages to provide that pull to get decent programming talent away from the capital even though we imagine this must feel like a slog sometimes.
Verdict: The Hut's success over the next few years will depend on pinning down a raison d'etre we aren't quite sure we yet understand. We are sure the management do but that needs translating more clearly. We think the competition is intense. Cookson has been busily setting up his own site and we wonder whether the offer is that different from places like Boots on one side and Asos on the other. What is more we have seen the troubles that lower-end luxury sites such as My-Wardrobe have had.
But if The Hut's management and main investors Balderton feel they can prove the company is a different proposition that competes on more than just its old strategic position of price, and if it can prove growth is sustainable, then we are sure an IPO will be confirmed in the next few months.
Next on our list of firms under the microscope: Missguided.com
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