Mon, 30 Apr 2012 | BUSINESS SALE
Fashion store Hobbs is being groomed for a sale by its private equity firm owner 3i, it has been revealed.
The popular high street store looks likely to be valued at between £200 million and £250 million thanks to its relative good health in comparison to many other retailers that are struggling in the current economic climate.
Aquascutum is one of the latest high-end fashion stores to have entered administration, but even in comparison to some of 3i's other investments, Hobbs is performing well, with low debt levels and a real chance for expansion.
It appears that expansion is the main driver behind this sale. Iain MacRitchie, chairman of Hobbs, told the Sunday Telegraph that the firm has sought the advice of a corporate finance adviser at PwC on its growth plans for the next two years, with a particular focus on the possibility of international expansion.
He told the paper: “We now have the brand, creative talent, range of products and financial strength to realise our international potential.”
Mr Ritchie added: “PwC are devoting considerable resource to help us develop our online capabilities, supply chain and introduce us to international trading partners.”
3i bought Hobbs from Barclays Private Equity, now Equistone, for £111 million back in 2004. At the time it put around £75 million of debt on the company's balance sheet to finance the transaction but since the deal Hobbs has been able to repay the debt without breaching loan covenants and now has a £32 million debt facility, which includes £12 million for working capital.
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