Womenswear retailer Hobbs has secured £14m of new investment from its private equity backer 3i and parachuted in turnaround specialist Iain MacRitchie to replace retail veteran Tony Campbell as chairman.
Campbell has relinquished his stake in the business as part of the restructure, along with a handful of other former directors and their families, including that of former Hobbs chief executive Nick Samuel who died last June.
The change, which has been several months in the planning, has simplified Hobbs’ shareholding structure and released funds to incentivise the existing management team and potential recruits. 3i continues to control just over 80% of the business - 42% through its own stake and 40% through Eurofund IV funds it manages.
Campbell, who was one of the key executives responsible for the turnaround of Asda in the 1990s, has been Hobbs chairman for eight years.
MacRitchie comes from an FMCG marketing background and has spent the past six months overseeing a strategic review of Hobbs, commissioned by 3i last year from branding consultancy Added Value.
MacRitchie will spearhead plans to develop each of Hobbs’ sub-brands to give each a more distinctive feel. Chief executive Nicky Dulieu said: “There is still a perception gap between the old Hobbs and what we actually do now.”
Hobbs has also recruited Loraine Woodhouse as group finance director with immediate effect. It is Woodhouse’s first role in the fashion industry. She was previously finance director at Capital Shopping Centres and Costa Coffee.
Hobbs, which has 59 standalone stores and 65 concessions, increased sales by about 12% in the year to January 2011, according to Dulieu. It has also increased profits, though not quite to pre-2010 levels.
Dulieu said that Hobbs would not be passing on the VAT hike to customers. “For a fashion brand you can’t just add 2.5 percentage points. We will look for opportunities to add more value to products that the customer would be happy to pay for - for example extra detailing that will justify £10 extra for a dress.”