Robert Dyas, La Senza Deal Making Point to Private Equity Alternatives

Last Updated Apr 8, 2009 10:59 AM EDT



A couple of months ago, this blog reported on the difficulties being experienced by retail private equity investor Baugur and questioned how retail companies will get their finance in future. It appears the alternatives are becoming apparent with two high street chains finding salvation through buyouts orchestrated, in Robert Dyas' case its management and the former owner investing in La Senza.

Hardware store format Robert Dyas has just completed a management buyout where the retailer's managers have managed to gain the support of a group of banks to secure the finance for the deal. Chief executive Steven Round is heading up a buyout team backed by Lloyds Bank.

At the beginning of the week, reports came in that Dragon's Den star Theo Paphitis is in talks to buy a majority stake in La Senza, the lingerie retail chain he sold to private equity investor Lion Capital in 2006 for £100m.

It is likely that the stake Paphitis buys back is going to be nowhere near that sum.

Both of these ventures are examples of how committed retailers are finding ways of saving viable high street brands now that private equity funds appear to be withdrawing from the scene.

Crucially, Robert Dyas is an example of where business leaders have been able to get investment from a bank. At a time when banks are so wary of any risk whatsoever, this is probably an aberration of current trends and not a sign the banks are going to readily open their coffers to other retail entrepreneurs.

Let's hope the new shareholders of the two chains are as shrewd in their running of the stores as they are in securing the funds. The more the banking community sees ventures like these succeed, the happier they will be about lending more money to retailers.

(Photo: Loz Flowers, CC2.0)