3i has been looking for some time to invest some of the proceeds from profitable realisations in Pets at Home, Early Learning Centre and Ben Sherman. So it was not entirely unexpected when the UK-based middle market specialist acquired Hobbs, the female fashion chain, from Barclays Private Equity in a deal worth £111m.
Hobbs was backed by Barclays Private Equity in a management buyout led by managing director Nick Samuel in 2002. It has since performed strongly, with pre-tax profits doubling to over £9m in the year to January 2004. The total number of outlets has also increased to more than 60 from 34 in less than two years and is expected to reach 80 by the end of 2006.
3i, which also owns part of Gant, the global menswear label, says there is now potential to develop the business internationally. The directors of Hobbs have increased their stake in the venture from 20% to 37%. The management team remains with the group, with Tony Campbell as chairman, Nick Samuel as managing director and Mike Trotman as finance director.
“With our wider product offering, including the fast-growing Accessories range, and our successful store opening programme, we are well placed to achieve further growth,” said Samuel. “We anticipate reporting record results for the year to January 2005.”
The disposal of Hobbs was handled by Hawkpoint. Addleshaw Goddard and KPMG also acted for the company. BDO Stoy Hayward advised Hobbs’ management team.