Ailing shoe chain Dolcis is to be snapped up for less than £3m - well below the originally touted sale price - by John Kinnaird, a former business partner of Scottish tycoon Tom Hunter.
It is thought that Alexon, the listed fashion group that owns Dolcis, could announce the sale as early as tomorrow. Mr Kinnaird is leading a group of investors who will take a majority stake in the business, while senior debt is being provided by Epic Investment Partners, which specialises in turning around struggling businesses.
Alexon put the once-trendy retailer on the market in the summer, hoping to get between £15m and £20m. But adviser Hawkpoint, the corporate finance house, was unable to secure the price after it emerged that sales at the 200-strong chain had slowed. Alexon paid £13.7m for Electra Investment Trust's stake in Dolcis in 1999. "This company has been under the hammer for several months," said one insider. "Dolcis is a somewhat tired name on the high street, but these guys obviously reckon that they can make a fist out of it."
Mr Kinnaird's last business was the 19-strong Warner Bros Studio Stores chain, which went into administration in May 2004. Mr Kinnaird reportedly blamed expensive leases on flagship stores for "crippling the business".
Before that, Mr Kinnaird was retail director of Sports Division, which Mr Hunter sold to JJB Sports in 1998 for £286m. Mr Kinnaird is understood to have made considerable profits on the back of the deal. Epic, meanwhile, has invested in other retailers, such as Past Times.
Alexon, which also owns the Bay Trading Company and Ann Harvey brands, reported interim pre-tax profits of just £1m in October, down from £7.9m last year. At the time, chief executive John Osborn blamed "unseasonably warm weather in September and soft consumer demand". Shares in Alexon have fallen heavily throughout the year.Reuse content