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Investors look to British high street

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13 Mar 2012

British high street fashion brands are in demand as investors look to acquire stakes in UK retail businesses. Corporate adviser Clearwater Corporate Finance compiled a report called The Spend, which calculated overseas investors led 42%

of mid-market deals in retail in 2011, a rise from the 38% last year and 2009’s figure which stood at 18%.

Last
year, several UK brands received foreign investment including Schuh, which was bought by US group Genesco; Kurt Geiger, which was acquired by another US business Jones Group; and Jones the Bootmaker, which was bought by Dutch business Macintosh Retail Group.

In the short time of 2012 a Kuwati retail group which operated franchises for La Senza, bought 60 of the lingerie retailer’s UK stores after it collapsed into administration in January.

Gareth Iley, a partner at Clearwater’s consumer sector team said: “Both UK and overseas corporates are acquiring for a number of reasons, including to establish a market presence, grow market share, acquire particular capabilities or access brands that have the capability to be grown globally.

“Retailers in Britain are very reliant on overseas suppliers and we are seeing these suppliers taking an interest in buying up the distressed UK firms in order to secure business for their factories. Similarly, those who run overseas franchises also have an interest when the UK group is in difficulty.”

“Currently most of this activity is taking place in the mid-market space where buyers perceive there to be less risk, a number of high-quality businesses and more deal flow. However, at some point I think we will see one of the UK’s top high-street names being acquired by an overseas investor.”

Clearwater has released the spring edition of the spend, its twice-yearly consumer commentary publication which rounds up deal activity and predicts upcoming trends in the sector.

Image: UK high street