So has White Stuff got the right stuff? Undoubtedly the answer is yes. But this week the lifestyle fashion retailer announced that it had called off its search for a minority investor.
This should not be viewed as a snub following a lack of interest – private equity company Phoenix Equity Partners was supposedly close to sealing a deal in June – but more as poor timing.
White Stuff chief executive Sally Bailey was quick to deny claims that the decision was taken because KPMG had not received high enough offers. She said the retailer was “doing so well” that it had decided it was “going to carry on alone”.
However, this answer doesn’t quite tally. Phoenix, which is known for its investments in entrepreneurial retail businesses, has nailed its colours to the mast recently and the odds are on that its offer will have been disappointing for White Stuff.
Phoenix’s most recent retail foray was with the long, protracted sale of LK Bennett, only completed this month for between£80 million and£100 million – some way below the£150 million price tag founder Linda Bennett is thought to have wanted.
White Stuff founders George Treves and Sean Thomas may not have been as amenable as Bennett to accepting a lower offer than the reported£70 million to£80 million price tag for between a 10 and 20 per cent stake.
And it is a buyer’s market. Now is surely not the time to hoist a for-sale sign over a business unless there is no alternative. Valuations are unlikely to meet the retailer’s expectations and are undoubtedly languishing at the lowest levels. And many investors will be waiting for values to fall further.
The vultures are no doubt circling, ready to pick the bones of those that are less able to go it alone than White Stuff.
Fortunately for White Stuff, there is little doubt that it can carry on regardless. A 15 per cent hike in like-for-likes and a 46 per cent increase in total sales to£12 million in the quarter to the end of July is a performance to make any retailer green with envy in the present climate.
White Stuff is a retailer well placed to weather the economic storm. It benefits from its well-honed niche positioning and appeal to a well-to-do clientele. It has established a brand loyalty among its yummy mummies and their City husband customers, who have followed the brand from its beginnings 20 years ago in über-sloaney French ski-resort Meribel and its first standalone store opening in Clapham in 1991.
Treves and Thomas may have to wait a little longer to retire to their mountain retreat.