La Senza mulls shop closures

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The Independent Online

The private equity owner of the troubled lingerie retailer La Senza has floated plans to close a number of under-performing shops in a bid to turn around its performance and slash costs.

Lion Capital has sounded out some retail restructuring companies, which could include Hilco, about its proposals.

A key focus of Lion Capital's plans is the ownership structure of Contessa, the sister lingerie chain that Lion acquired from Theo Paphitis, one of the judges on the BBC's Dragons' Den, in October 2006. It converted the Contessa stores to, and trades them as, La Senza, but it is understood that 66 shops are still registered with landlords under the Contessa name.

This could give Lion the option to put any unwanted leases into Contessa and sell or close them, at a time of dreadful trading on the high street. Up to a quarter of the lingerie group's 180 branches could be offloaded.

Lion Capital bought La Senza in 2004 but in the financial year to March 2010 the retailer breached certain banking covenants.

However, Lion moved to tackle its financial woes by acquiring 100 per cent of the debt in the lingerie chain in January 2010. Lion declined to comment last night.