Hobbs eyes Middle East and Canada expansion

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Hobbs, the upmarket womenswear chain, is planning to press the button on an overseas expansion programme that could see it open stores across the Middle East and in Canada.

The group, which was acquired by its management team from its founders at the end of 2002 with backing from Barclays Private Equity, is in advanced talks with a potential franchise partner in the Middle East. It is also talking to Holt Renfrew, the Canadian department store group owned by the Weston family, which acquired Selfridges last year.

Nick Samuel, the chief executive, said he was targeting the Middle East because there was "a strong demand for British product" across the Gulf states. Many of its overseas customers are from the region, lured by the group's classic British styles.

"We are discussing the opportunity with a franchisee situated in one of the Gulf states," Mr Samuel said. "We believe we would have the potential to open up to six franchise shops throughout Bahrain, Kuwait, Dubai, Abu Dhabi and Qatar."

Since buying Hobbs for £30m from Yoram and Marilyn Anselm, the husband and wife team who launched it in 1981, Mr Samuel has expanded the chain from 34 stores to 54. He joined Hobbs from Karen Millen, where he spent 10 years as finance director. He reckons he can eventually double the estate to 100 shops.

The company grew its sales by 40 per cent during its first year of new ownership to £50m and increased its operating profits more than 80 per cent to £7m. Mr Samuel said he hoped to have opened concessions across Holt Renfrew's 19 Canadian stores by the start of 2005. "We need to do a lot of homework... but by the beginning of next year we will be established."