New Look sale falters

Apax Partners and Permira, the private equity owners of UK fashion chain New Look, have reportedly pushed back the deadline of the auction to sell the business after failing to attract suitable offers.

The sale of UK high street chain New Look has reportedly been delayed after buyout firms Apax Partners and Permira, the company’s owners, asked for another round of bids.

The Times reported that the two firms took the unusual step after failing to attract suitable bids. Some of New Look’s suitors, including The Blackstone Group, KKR and CVC Capital Partners, have either failed to make satisfactory bids and not been invited to further rounds, or abandoned their bids completely.

Apax and Permira, which originally bought the business for £699 million in 2004, are thought to be seeking bids in the region of £2 billion (€2.9 billion, $4 billion) – which would mean a windfall of about £1.3 billion for the two firms.

The newspaper reported that BC Partners and the TPGWarburg Pincus consortium are still in the running for New Look, but that the CVC-Landmark Group consortium has dropped out of the process.

The New Look sale coincides with Permira’s pursuit of a business in the luxury end of the fashion market. The firm recently bought a 29.6 percent stake in Italian fashion brand Valentino, and has entered exclusive negotiations to acquire a further 24 percent from the Italian Marzotto family, Valentino’s second biggest investor. The deal would be the biggest buyout to date in the European fashion sector.

Traditionally not a target for private equity capital, the luxury fashion sector has recently been attracting considerable interest from buyout firms. Towerbrook Capital Partners bought iconic UK fashion brand Jimmy Choo in February from Lion Capital for £185 million (€280 million, $362 million), generating a return of 2.25 times Lion’s original investment.

Apax declined to comment and Permira was unavailable for comment.