New Look management team receives £25m payout
The management team at New Look, the discount fashion retailer that was taken private in a £700m deal two years ago, has taken around £25m in cash out of the business after raising debt of £359m to fund a payout to its shareholders.
Tom Singh, the chain's founder and 22 per cent shareholder, also received a £79m handout, while Apax Partners and Permira, the private equity houses that backed the original deal, got £108m each. They have recouped their original investment more than twice over following a debt restructuring only 13 months ago.
Phil Wrigley, the chief executive, and six fellow senior directors are reinvesting around half of their £50m-plus windfall back into the loan. They will earn 13 per cent interest each year on the £25m they have effectively lent back to the company because the dividend was funded via a payment-in-kind loan, which carries an unusually high interest rate. The loan took New Look's debt to just over £1bn.
Details of the cash payout came as New Look unveiled a full-year trading update that showed its underlying profits had risen 9 per cent to £174.1m. Its like-for-like sales were held back by the opening of a new distribution centre, which disrupted trading. Underlying sales fell 2.8 per cent although new space boosted total sales by 6 per cent to £862.2m. The group is expanding aggressively in the UK and in Belgium and France, where it owns the MIM fashion chain and is also testing the continental appetite for its core New Look brand.
Mr Wrigley struck a more optimistic note about the coming 12 months than many of his rivals, predicting it would be "at best benign and at worse a little bit difficult". He is budgeting for like-for-like sales growth of at least 2 percentage points.
In an attempt to dispel the myth that all private equity-backed businesses are starved of investment, New Look said it was spending £100m on growing the business over the next year - double the amount it spent during its final year as a public company. The bulk of the money will go on opening new stores. Last year, it spent £60m on the business, including £40m on a new distribution centre.
Mr Wrigley said if there was appetite from potential investors "maybe at some point next year" the group would seek to return to the stock market.
- 2 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 3 US? China? India? The 10 biggest economies in 2030 will be...
- 4 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
The only black face in the Ukip manifesto is on the page about overseas aid
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...