Retail chiefs are hungry for private equity deals

The recent wave of private equity deals in UK retail, ranging from department store group Debenhams to fashion chain Oasis, has fuelled hunger among store bosses for more deals.

A survey of 50 retail chief executives, finance directors and chairmen, along with 30 active private equity investors in retail, revealed that 90 per cent believed private equity deals would continue at the same rate over the next three years.

The poll, organised by retail consultancy Javelin Group, discovered that three-quarters of the retailers would be interested in staging management buy-outs and buy-ins if they were presented with the right opportunities.

Sir Geoff Mulcahy, former Kingfisher chief executive and now chairman of Javelin, said such hunger for deals means retailers must regard themselves as potential bid candidates if they want to survive.

'If you don't continue evolving to meet the needs of customers, either new management will come in with private equity, or a new plc will come in and take you over. You must always be thinking of yourself as a takeover target,' he said.

Mulcahy believed ownership changes had already prompted a transformation of many retailers' mindsets. He said: 'We are seeing increasing evidence of retailers thinking like venture capitalists as the most effective impetus for change. Private equity involvement has been one of the most successful drivers of shareholder value across the sector in recent years, and retailers have realised there are valuable lessons to be learned.'