Making sense of the past seven days
Get ready for Europe's biggest-ever private equity deal and the first buy-out of a FTSE 100 company.

KKR, the original barbarians at the gate, and Alliance Boots deputy chairman Stefano Pessina have tabled a£10.6 billion offer for the health and beauty giant. Barring a bigger offer from rival suitor Terra Firma and Wellcome Trust, it's a done deal and Alliance Boots will become private equity's greatest retail trophy.

What does it mean for the retail sector? First, it shows - despite the failure of the recent move on Sainsbury's - that very few store groups are beyond the reach of the buy-out kings. So expect retail sector shares to remain buoyed by bid gossip, constant press coverage and City speculation about who will be next.

In terms of trading, it's harder to gauge what the deal will mean. Wholesaling through Alliance represents a big tranche of the company's business and developments on that front will not matter to most retailers.

Boots stores have shifted emphasis over the past few years to focus much more on pharmacy and wellbeing. There's still all the cosmetics, perfumes and Christmas deals, but it is attempting to make the most of its unparalleled levels of trust among consumers and their ever-growing interest in healthy living.

That makes sense. It makes the chain less vulnerable to the growing power of supermarkets in its markets and gives a clear point of difference and reason for existence on the high street.

That retail strategy is likely to be pursued by Pessina after the acquisition, as the synergies between Alliance and Boots are exploited. If it sounds familiar, that's because it is - it was part of the original rationale for last year's merger.

The City never warmed to the link up, yet Pessina is so convinced of its merits that he has been willing to increase his offer significantly. Nobody outside the company has ever been sure of how to value it and what its value is. But you can be sure that if Pessina is willing to stump up£10.90 a share, it's potentially worth much more.

Despite the problems of Debenhams - and perhaps partly because of them - department stores are suddenly very sexy. John King is busy turning House of Fraser into the UK's version of Nordstrom and, as we report in today's edition of Retail Week, entrepreneur Harold Tillman intends to build up a chain under the resurrected Allders name. Both ventures are great examples of the dynamism of UK retailing and how businesses can be evolved to create a point of difference and cater for distinct customer groups. Tesco might take£1 in every£7 of retail spend, but competition remains fierce for the other six.