Buy cheap, pile on debt, flog assets and extract the value, sell high to a new owner and pay yourself handsomely – that’s one characterisation of private equity, with recently collapsed department store group Debenhams seen as the poster child in critics’ eyes.
Identify value, realise it through funding and expertise to accelerate business growth, sell on in the expectation of future success – that is the alternative version, welcomed with open arms by investors in the latest round of IPOs of retailers such as Dr Martens, Moonpig and The Hut Group (THG).
They follow in the footsteps of others including Pets at Home, previously invested in by Bridgepoint and KKR.
But is it really a case of one or the other when it comes to private equity ownership of retailers?
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