UK retail is braced for a boom in foreign investment after a series of acquisitions over the past year, predicts corporate adviser Clearwater Corporate Finance.
In its report on retail investment called The Spend, Clearwater calculated overseas investors led 42% of mid-market deals in retail in 2011, a rise from the 38% last year and 2009’s figure which stood at 18%.
Last year, several UK brands received foreign investment including Schuh, which was bought by US group Genesco; Kurt Geiger, which was acquired by another US business Jones Group; and Jones the Bootmaker, which was bought by Dutch business Macintosh Retail Group.
The trend has already spilled into 2012 as Alshaya, a Kuwati retail group which operated franchises for La Senza, bought 60 of the lingerie retailer’s UK stores after it collapsed into administration in January.
Partner at Clearwater’s consumer sector team Gareth Iley said: “Both UK and overseas corporates are acquiring for a number of reasons, including to establish a market presence, grow market share, acquire particular capabilities or access brands that have the capability to be grown globally.
“Retailers in Britain are very reliant on overseas suppliers and we are seeing these suppliers taking an interest in buying up the distressed UK firms in order to secure business for their factories. Similarly, those who run overseas franchises also have an interest when the UK group is in difficulty.”
He added that although most of the activity is within the mid-market, it is a matter of time before an overseas investor snaps up one of the UK’s top high-street names.