Scottish entrepreneur John Kinnaird has insisted that shoe retailer Dolcis will not go into administration, despite its private equity backers pulling out.
Speaking for the first time since Dolcis was reported to be in crisis finance talks, Kinnaird told Retail Week that he hoped to firm up a deal with a new backer within the next two weeks.
He said: “At this point, we are absolutely not going to go into administration. We are in the final stages of securing a new partner and I am 99.9 per cent sure that this deal will be completed.”
Kinnaird, who bought Dolcis from Alexon with backing from Epic Private Equity for£2.7 million in December 2006, is working with advisor Cavendish Capital. “At our December board meeting, Epic told us it wanted to exit the business. In hindsight, Epic was probably not the right partner as it is essentially a restructuring fund and takes a short-term view. We need a long-term partner to build the business back up.”
Kinnaird has implemented a series of changes to 65-store Dolcis, which he expects will move into profit this year. In the six months to July 29, 2006, Dolcis made a loss of£2.4 million.
The first new-look store opened in Glasgow in November and Kinnaird wants to open a further five in the first half of this year. He has also improved product quality to position Dolcis in the mid-market, “above Barratts, on a par with Faith and below Dune”. The retailer is focusing on£35 to£45 shoes, rather than its traditional£15 market.
“Trading over Christmas has been good,” said Kinnaird. “We are still down on our like-for-likes, but getting much closer to a positive, so we’re fairly pleased.”
An Epic spokesman said it had sold its share in Dolcis back to management, but that it would consider further retail investments. Epic also has a stake in gift retailer Past Times, which he said it will continue to back.
The withdrawal comes amid intense competition from high street fashion players’ footwear ranges. Stead & Simpson, owner of Shoe Express, is understood to be up for sale and Sir Tom Hunter’s Qube has been struggling.
Faith chief executive Steve Cotter said its like-for-likes were up 4 per cent in December. However, he said the lower end of the footwear market is struggling.