Goldman-backed retailer WorldStores makes urgent cash call

An online furniture retailer backed by Goldman Sachs (NYSE: GS-PB - news) is seeking an urgent cash injection amid intense competition for British customers.

Sky News has learnt that WorldStores, which owns the flash-sale brand Casafina, has appointed KPMG, the accountancy firm, to oversee a quickfire search for new investors.

Insiders said that WorldStores wanted to wrap up a deal within weeks, although the prospects for a solvent sale were unclear on Tuesday.

Goldman's merchant banking division led a £25m investment in WorldStores last year - a deal designed to pave the way for significant expansion, including a more efficient home delivery service.

Despite growing sales, however, losses at the company are expected to rise from £9.6m in 2015 to £12.5m in this ‎financial year, before falling again to £6.4m next year.

WorldStores, which also owns the Kiddicare brand which used to be a subsidiary of the Wm Morrison supermarket chain, sells more than 500,000 products and claims to be the UK's biggest online retailer of home and garden products.

Based in Twickenham, it was set up by online marketing experts Joe Murray and Richard Tucker in 2008.

It has grand ambitions to compete with offline furniture retailing giants like Ikea, and to replicate the growth of digital retailers such as AO.com and Ocado.

The size of Goldman's shareholding is undisclosed, but sources said the Wall Street bank was unlikely to remain a significant investor if a sale was successfully concluded.

One of the executives who led Goldman's investment in WorldStores last year recently left the bank for a job at Warburg Pincus, the private equity firm,‎ although sources said his departure was unconnected to the deal.

In addition to Goldman, WorldStores' other blue-chip backers include Advent Ventures and Balderton Capital.

Goldman and KPMG declined to comment on Tuesday, while WorldStores could not be reached.