Cinven buy Kurt Geiger for £245m
The financial press has been full of the news that Cinven, the private equity firm, will be buying out high-end fashion brand Kurt Geiger.
This really could be the year for the shoe and bag label, which has long prided itself on being at the front of cutting-edge fashion, offering catwalk trends and more affordable prices on products that are designed to appeal to celebrities and the public alike. Set up in Bond Street back in the sixties, it now makes over £30 million of profit every year. Its products are often sported by those in the public eye, including the singer Rihanna.
A Brand with Credentials
The brand has over fifty years of experience in the industry, and already it is Europe’s largest retailer of luxury footwear. The news about Cinven’s purchase is exciting for them indeed. As it is the UK’s biggest shoe maker, the purchase price was a very healthy £245 million, and the new arrangement should give Kurt Geiger plenty of great leverage for future expansion and repositioning within the market, especially if it has global expansion intentions.
Certainly, Cinven’s team has flagged up this intention, speaking of Kurt Geiger’s significant potential for further international growth as well as digital expansion alongside opportunities for consolidation and repositioning.
Strengthened Finances and Management Experience
The brand currently operates as an independent business, so the buyout will certainly strengthen its financial position and give it access to additional management capabilities and sector experience that can only benefit it.
Previously, Kurt Geiger had been owned by the former boss of Harrod’s until 2005, when it was purchased for £46 million by the private equity arm of Barclays Bank.
Certainly, online sales are booming in a market that is growing rapidly. Kurt Geiger’s management team have commented that their online retail efforts have generated more than £55m in revenue annually, representing 30pc of the business overall. Expertise in this field will be welcomed at the strategic management level if the brand is to position itself as effectively as possible in an increasingly competitive online space and further leverage the brand.
Cinven has ownership stakes in a number of high-profile British firms, including Fitness First, Allied Carpets, William Hill, Spire Healthcare, Gala Coral and United Business. The purchase represents a transfer of assets from Sycamore Partners, the US private equity firm.
Cinven has already confirmed that Kurt Geiger’s management team, with Neil Clifford at the helm as CEO, will remain in place after the deal is completed.