Awear chain sold for €70m in MBO deal
Buyout team is backed by UK private equity firm
CLOTHING retail chain awear has been sold by the Brown Thomas Group for €70m to a management buyout (MBO) team which is backed by UK private equity firm Alchemy Partners.
It is understood that Brown Thomas had expected to get €85m for the awear business but later settled for the lower sum.
It is also understood that offers for the group ranged between €50n and €70m and that high rents and an increasingly competitive market led to the acceptance of the lower price.
Industry sources said yesterday that a number of other retail groups had also looked at the chain, including Pamela Scott.
They added that a consortium backed by Bernard McNamara pulled out of the bidding earlier this year.
The deal will have to be cleared by The Competition Authority before it is given the green light.
Neither company would disclose any details of the deal yesterday. It is not known what percentage of the company Alchemy has taken.
Founded in the 1960s, there are 28 awear stores in the Republic, Northern Ireland and Britain - there are 25 outlets in the Republic. Commenting on the buyout, Annmarie Flood, awear managing director, said: "Expansion at home and in the UK market represents the next phase of our growth and we look forward to implementing our plans.
"We, as a team, look forward to building on our strong history of success."
Galen Weston, chairman of the Brown Thomas Group, wished the new owners luck and said that the retention of the current management team to drive the business forward is a testament to their impressive track record.
However, associated with the business.
It is understood that Brown Thomas decided to sell off the low-cost brand when soaring costs started to eat into profit margins.
awear is a wholly-owned subsidiary of Brown Thomas and separate accounts are not available for the chain.
The latest accounts for The Brown Thomas Group showed a near-11pc drop in pre-tax profits in the year to end-January 2006, compared with the previous year. The profits were hit by costs and significant investments and losses at its BT2 subsidiary, which targets the youth luxury market.