Barclays PE invests in fashion retailer

The UK private equity house has backed the £30m management buyout of Hobbs, the upmarket women’s fashion retailer.

Barclays Private Equity, the UK-based private equity house which at the end of last year raised E1.25bn for a European fund, has announced its fifteenth and final buyout of 2002, backing the £30m management buyout of Hobbs, the design-led manufacturer retailer of ladies clothes.

Barclays will take an 80 per cent stake, with management, led by managing director and retail entrepreneur, Nick Samuel, owning the remaining 20 per cent. Debt funding is being provided by Barclays Leveraged Finance, representing around 50 per cent of the total deal value.

Founded by Yoram and Marilyn Anselm in 1981, Hobbs is an upmarket women’s wear retailer targeting women aged between 25 and 45. The firm, which trades from 34 locations, has forecast turnover for the year to January 2003 of approximately £40m.

Barclays, which acts as a banker to Hobbs, was approached to discuss funding a MBO at the beginning of last year. The Anselms are thought to have been considering a buyout of the business for a number of years.

Commenting on the firm’s plans for the business going forward, Steven Silvester of Barclays Private Equity said the MBO team planned to increase the number of outlet stores to 60 over a period of five years, citing Chester, Brighton, Exeter and Aberdeen as potential sites for further expansion. The firm has not discussed any plans for add-on acquisitions.

Silvester said:“Hobbs has witnessed consistent growth and is an excellent business. Over the next few years, we intend to build on this success and increase the number of trading locations. Hobbs is well placed both in terms of its supplier relationships and its increasing customer base to meet these expansion plans.”

The transaction is Barclays Private Equity’s first management buyout since successfully closing its first non-captive fund since 1989 in December 2002. Recent deals include the E55m MBO of UK care home operator Caretech, the E75m buyout of COSi in the UK and the E16m buyout of CER in Italy.

Barclays Private Equity was advised by BDO Stoy Hayward, KPMG, Addleshaw Booth & Co and OC&C.