Private equity group Cinven has struck a £245m deal to acquire footwear retailer Kurt Geiger, making it the third owner in five years.
“Don’t use a picture of us,” quips Maxim Crewe, partner of Cinven, the new owner of Kurt Geiger, referring to himself and the shoe retailer’s boss Neil Clifford as we speak following news of today’s deal. “We’ve got faces for radio.”
There’s a jovial atmosphere between the two men – Clifford, the constant in Kurt Geiger’s life (he’s been chief executive since 2003) and Crewe, part of the latest private equity firm guiding a new chapter in the retailer’s life.
Cinven, whose portfolio includes hosting and domain services firm HEG and aircraft leasing company Avolon, has agreed to acquire Kurt Geiger, which has 180 stores and concessions worldwide, from Sycamore Partners for £245m.
The deal means Kurt Geiger has changed hands three times in five years after Sycamore Partners bought its former owner the Jones Group in 2013.
Prior to the Jones Group, Kurt Geiger was owned by private equity firm Graphite Capital and Barclays.
“Private equity owners keep buying it to make a quick buck – it’s the gift that keeps on giving. People keep making a turn from it.”
Richard Hyman, Richardtalksretail.com
The high turnaround in owners hasn’t gone unnoticed.
“How many times can can you sell the same business?” asks retail analyst Richard Hyman. “Private equity owners keep buying it to make a quick buck – it’s the gift that keeps on giving. People keep making a turn from it.”
Will this be another short ownership for Kurt Geiger?
“Cinven is a long-term investor for five years or more,” says Crewe. “This is the start [of Kurt Geiger’s] next phase of growth.”
It’s the first footwear and accessories acquisition for Cinven, but they company has clocked up consumer brand experience and a “long track record with brands” including Pizza Express and William Hill, says Crewe.
“Cinven is a real believer in buy and build strategies through acquisition. Kurt Geiger is a fantastic platform to do this”
Maxim Crewe, Cinven
The private equity firm also currently owns DIY retailer Maxeda and clothing retailer Camaieu.
The acquisition follows on from the purchase of footwear retailer Office to South African retailer Truworths International from private equity firm Silverfleet for £256m.
How ambitious are the new owners?
There’s no big reveal of a five-year plan but Crewe says: “Cinven is a real believer in buy and build strategies through acquisition. Kurt Geiger is a fantastic platform to do this both in terms of helping the business to capitalise on the online opportunities it faces, the ability to expand into adjacent products and in international.”
Clifford, known for being relatively private about the company, similarly won’t divulge but says there’s “real traction” with its Miss KG brand. “We’re ambitious, our ambition has always been incredibly large for the company.”
“Kurt Geiger’s growth prospect represent one of its biggest selling points for new owners Cinven”
Anusha Couttigane, Conlumino
Conlumino fashion analyst Anusha Couttigane believes expansion will remain a key ambition for the company, especially given that much of Kurt Geiger’s senior management is set to stay with the brand.
“There will be compromises they have to make,” she says, “but it is highly unlikely that its current management would recommend halting expansion altogether, especially as Kurt Geiger’s growth prospect represent one of its biggest selling points for new owners Cinven.”
Clifford does say that the retailer is “adding a third string” to its bow in the form of its kidswear business.
The retailer revealed in January that it was creating a mini version of some of its bestselling styles for new born to 11-year-olds.“We’ve also taken over the kids shoes business in Selfridges and Harrods which are doing brilliantly.”
Asked whether he sees the potential for standalone stores, he responds: “You never know.” He adds that new Kurt Geiger stores are also on the horizon, but refuses be drawn on detail.
In a market that has seen much fallout over the years, with Barratts, Dolcis and Faith just a few of the footwear specialists to close their doors, Kurt Geiger has marched ahead.
In its latest full-year results, published in October, pre-tax profits surged 242% to £11.3m for the year to December 31, 2014. Sales soared 15.4% to £251.8m.
“I’ve got high regard for Kurt Geiger,” says Hyman. ”They have a point of difference and their performance shows that. They’re definitely one of the strongest brands in footwear.”
With a “positive” Black Friday and “a cracking year”, Clifford says “all is fine, there’s no biting nails.” Let’s just hope there’s some stability with the shoe staying firmly on the foot with its new owner, Cinven.