We have just been purchased by new private owners. How can we expect the culture and running of the business to change?

Some recent private equity acquisitions have been funded much more through equity than debt - the so-called debt-equity ratio.

AlixPartners director Dan Murphy says private equity owners using their own equity to acquire businesses will be much more operationally focused and are likely to install their own people who have a deep knowledge and experience of retail.

“This current wave of private equity investment is going to be much more about fixing the operational model and driving growth, and less about the debt structure,” he says. “This time they are going to be much more like owner managers.”

Senior and experienced retailers now working closely with private equity - such as former chief executive of Alliance Boots Richard Baker - will be crucial to this, says Murphy.

This is very different from the previous model. “Many private equity houses were very good at putting the financial investment case in place and getting the debt structured, and covenants agreed. However, as soon as underlying operational issues surfaced they were not so clear on what was needed.

“Previously, the operational focus might have been on exciting projections for growth through international, multichannel or new product categories to drive the exit valuation and multiple. For equity-funded deals, the focus is going to be more on getting existing stores profitable and organic growth in the home market,” says Murphy.

He adds that recent deals show there is still an underlying confidence in the retail sector. “Private equity is demonstrating a cautious optimism - as seen with the DFS and Poundland deals - despite all the warnings of a double-dip recession.”