High-end buggy brand Uppababy explores sale

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High-end buggy brand Uppababy is exploring a sale, according to people familiar with the matter, the latest group in the sector to do so.

The US company, which competes with the likes of Bugaboo and Stokke, was founded by Bob and Lauren Monahan in 2006 when, as parents, they were unimpressed by the buggies on the market. Uppababy’s buggies can cost up to $1,000.

Investment bank Jefferies was helping the Massachusetts-based company examine options, including a potential sale, the people said. Bugaboo is controlled by its founders, with a minority stake held by private equity group Seidler Equity Partners.

The global buggy market is forecast to grow at an annual rate of 6.25 per cent between 2022 and 2027, a pace that would push its overall value up by a further $4.3bn, according to Technavio, a research consultancy.

Uppababy generated sales of more than $210mn and over $50mn in earnings before interest, taxes, depreciation and amortisation, according to recent information sent to prospective buyers.

In recent years the industry has had to contend with several challenges, including higher costs and disruption to supply chains.

Uppababy is not the only buggy company examining options. Stokke, which is owned by South Korean conglomerate NXC, was considering options including a sale, people familiar with the matter said. Stokke could be worth about $1bn, Bloomberg has previously reported.

Joolz, an Amsterdam-based buggy brand backed by the Belgian investment fund Gimv, was working with bankers at Houlihan Lokey to explore a potential sale, according to people familiar with the matter.

Bugaboo, which is also based in Amsterdam and owned by the US private equity firm Bain Capital, appointed bankers last year to study options including a possible sale although it is not actively in the market, people said.

One private equity industry executive said there is the potential for consolidation at the high-end of the market given the cost savings tie-ups could yield.

The wider pram market has become more fragmented in recent years, with general retailers and online-only players making gains, said Sam Nguyen, a retail analyst at research firm Mintel.

“We’ve seen not only home retailers such as Ikea but discounters and fashion retailers exploring opportunities within the market,” said Nguyen.

But Leah White, head of consumer at the boutique investment bank Focus, said that upmarket brands such as Uppababy, Stokke and Bugaboo have proven resilient during economic slowdowns as buying a buggy is an “emotional purchase”.

Bugaboo’s sales have grown at a double-digit percentage rate over the past five years, a period marked by pandemic lockdowns and higher inflation, according to a person familiar with the group’s performance.

Jefferies, Bain, Houlihan Lokey, Gimv and Stokke declined to comment. Uppababy, Seidler, Joolz, Bugaboo and NXC did not respond to requests for comment.