Shares in overdrive as music retailer pumps up volume

GEAR4MUSIC, the rapidly growing musical instrument equivalent of online cycling specialist Wiggle, was tipped by Midas at 139p a share in July 2015. Now at 764p, investors might be considering banking a healthy profit.

Pianist and horn player Andrew Wass launched the firm in 2003 in York. Since floating on AIM in 2015 with the intention of becoming an internationally recognised instrument retailer, it has gone from strength to strength.

Edison Investment Research has gone as far as to say it has ‘excited the market with stellar growth’ since its stock market flotation, and beaten Edison’s forecast with 272 per cent earnings per share growth.

It said Gear4music’s experience of applying retail technology to disrupt a sleepy industry ‘leads to the aspiration that this could be a significantly larger international company, not only in Europe, but in a world market worth $17 billion’.

Wass’s previous business, a recording company, was launched in 1992 after he studied popular music and sound at Salford University. He began selling IT systems for the audio recording market in 1998, but his latest venture now sells more than 38,000 items – from 99p kazoos to Fender guitars and a Yamaha grand piano priced at more than £33,000 – from hundreds of manufacturers. It even sells own-brand products.

Gear4music has opened two distribution centres in Europe, plans to launch a US website and is acquiring a new £5.3 million freehold office building in York to complement its existing warehouse.

Panmure Gordon, broker to the retailer, said Gear4music had had a ‘meteoric performance’ since June 2016.

But it also said the firm was still a relatively small business and international sales were very much in their infancy, not yet even accounting for more than 40 per cent of the total and yet to break £25 million.

Midas verdict: Investors who bought in July 2015 could sell a portion of their investment to bank profits. But with sales continuing to outstrip expectations and international expansion plans in full flow, hold on to some for further growth.