Aurora management team size up distressed womenswear retailer to run separately

The management team behind Oasis-owner Aurora is interested in acquiring embattled womenswear retailer Jane Norman.

Aurora chief executive Mike Shearwood is understood to have this week met PricewaterhouseCoopers, which is leading an accelerated sale process.

Shearwood could pick up a slimmed down business cheaply should Jane Norman’s banks be forced to place it in to administration if no buyer is found, sources said.

However, any Jane Norman deal is likely to be dependent upon Debenhams, which houses Jane Norman concessions in its stores, has a change of ownership clause and is Jane Norman’s most profitable outlet.

Debenhams had been reported to be a frontrunner to buy Jane Norman should it hit the buffers, but sources said it is likely there is little stock left within Jane Norman to trade.

Debenhams’ willingness to acquire other businesses out of administration - such as the assets of womenswear chain Principles - depends upon its ability to continue to trade the stock. Any Jane Norman deal could therefore be reliant upon Debenhams’ readiness to relax minimum turnover guarantees in the short term.

In the event of a deal, it is likely Jane Norman would be run separately from Aurora’s chains but Shearwood could leverage economies of scale.

Sales and profits at Jane Norman have fallen in recent years and management admitted that it had become “stale”. Earlier this month it emerged that chief executive Ian Findlay had stepped down.

Both Aurora - in its previous incarnation as Mosaic Fashions - and Jane Norman were part-owned by now defunct Icelandic investor Baugur and nationalised Icelandic bank Kaupthing.

A syndicate of 15 banks now majority owns Jane Norman and former Aurora chairman Stewart Binnie became chairman in 2010.

If a deal goes ahead, it would not be the first time that the Aurora team have run a business outside the group umbrella. In March it spun off Karen Millen as a separate entity, because its global expansion plans meant its funding requirements were different to the rest of Aurora. Derek Lovelock remained chairman of Aurora but also became executive chairman of Karen Millen.

A source close to the situation said: “I suspect there are a number of people looking at [Jane Norman] but there are a number of unknowns.

It is still for sale but there isn’t much stock in the pipeline and there is a depleted management team. I am not sure how long the banks will continue to support them.”