Jane Norman delivers for Graphite

Graphite Capital, the UK mid-market private equity specialist, has sold its majority shareholding in Jane Norman to an Icelandic investor group comprising Kaupthing Bank and Baugur Group. The deal, which values the UK women’s fashion retailer at £117.4m, provides Graphite with a total return of 2.9x on its investment and an internal rate of return of more than 50%.

Graphite acquired a majority shareholding in Jane Norman in 2003, when it backed the £70m management buyout led by chief executive Saj Shah. Since then, the number of outlets has more than doubled to 39 stand-alone stores and 56 concessions. Over the past five years, annual sales have grown by 230% and operating profits by 250%.

“Graphite has helped us strengthen our management team and develop a successful strategy of rolling out stores and concessions across the UK and in Ireland,” Shah said. Baugur will help grow the business through further rollouts and expansion of the product range.

“The growth of the business has accelerated rapidly and this is an opportune time for new investors with a proven record in UK retailing to come on board,” said Graphite Capital partner Andy Gray. Gray, Anne Hoffmann and Markus Golser managed the transaction for Graphite and were advised by Hawkpoint. In the past 12 months, Graphite has completed 12 exits and refinancings, with a total valuation of some £800m.

Trading from its own outlets and concessions in department stores, Norman concentrates on fashion trends for the 15 to 25 years age group.