Private equity firms target retailer Cath Kidston in £75m bidding war

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The Independent Online

Several private-equity firms have made first-round bids for Cath Kidston, the floral clothing and homewares retailer, that is up for sale for at least £75m.

Silverfleet Capital, Inflexion, Barclays Private Equity, Darwin and ISIS are among those that submitted first-round offers on 29 January and are expected to press ahead with second-round bids for the 35-store retailer in the next fortnight. All the private equity firms either refused to, or were unavailable for, comment yesterday.

The retailer was founded by the designer Cath Kidston – who has a stake of just under 30 per cent – in 1993 when she opened her first shop in London. The bank Quayle Munro is running the sale.

The sizeable interest from the private-equity firms suggests that the retailer could be sold for north of £75m. The retailer is seeking an investor to buy a majority shareholding in the business to inject fresh capital and fund a roll-out of stores in the UK and Far East.

Cath Kidston, which has 28 shops and concessions in the UK and two shops in Ireland, wants to more than double the number of UK stores to 60 in three years. It also plans to grow to 50 stores in Japan, where it currently has five, as well as further outlets in China, Hong Kong and South Korea.

The retailer – best-known for its floral-print clothing, as well as its plates, tea towels and tents – has bucked the downturn and grew pre-tax profits by 61 per cent to £4.6m for the year ended 29 March 2009, according to the latest accounts available at Companies House. Sales rocketed to £31.3m during the period, compared with £19.3m the year before, although this was partly thanks to new store openings.

Meanwhile, the arts and craft retailer HobbyCraft is also up for sale for about £75m. It too is attracting substantial private-equity interest ahead of first round-bids due this week. Phoenix Equity Partners, Lloyds Development Capital, Graphite, ISIS and Bridgepoint Development Capital have already expressed an interest in 47-store HobbyCraft.