Irish Fashion retailer A|wear has been sold to a UK group called Hilco, which specialises in distressed restructurings.
No financial details were released yesterday although Hilco said it would provide A|wear with “extended working capital facilities to facilitate the business’s financial needs”.
A|wear was sold by Brown Thomas in 2007 for a reported €70 million to a consortium comprising UK private equity group Alchemy Partners and management, who took a 20 per cent stake in the business.
The deal was backed with debt provided by Ulster Bank. It was not clear yesterday if Ulster Bank had agreed to write off some or all of this debt as part of the transaction with Hilco.
None of these parties were available for comment yesterday.
Like most retailers in Ireland, A|wear has struggled in the recession. Latest accounts for Maple Topco Ltd, A|wear’s parent company, show revenues declined to €44.8 million in the year to the end of January 2010 from €58.1 million in the previous 12 months.
The company made a loss for the year of €17.8 million compared with a loss of €4.7 million in the previous 12 months.
Maple Topco’s bank borrowings amounted to €34.4 million at the end of that financial year.
A|wear said yesterday that total sales in 2010 reached €48 million.
Hilco’s plans for A|wear were not clear yesterday. Sources suggested the retail business could be sold on quickly by Hilco or even broken up.
This could not be confirmed. Calls to Hilco’s Irish and UK offices were not returned.
Hilco is led by chief executive Paul McGowan, who hails from Northern Ireland. On September 1st, it recruited Larry Howard, a former finance executive with Dunnes Stores, to become managing director of its Irish office.
Mr Howard was involved in a legal action against Dunnes earlier this year in relation to his employment. The matter was settled out of court.
Hilco recently acquired the Canadian business of HMV.
In a statement, Mr McGowan said: “We are delighted to have this opportunity to acquire one of Ireland’s strongest retail brands and look forward to providing operational assistance to A|wear management in the months ahead as the management team seek to address current market conditions in Ireland and develop its overseas markets.”
A|wear began trading in Ireland in the early 1960s and employs about 370 staff. It has 39 stores in Ireland and three in the UK. The company also runs an online store and wholesale businesses.
In a statement, Mark Naughton-Rumbo, joint chief executive of A|wear, said the provision of the working capital was an “important step” for the retailer.
“I would like to thank all of our lenders as well as our investors, for their tremendous efforts in completing this transaction,” he said.
It is understood that A|wear attracted interest from other parties, including Edinburgh Woollen Mill, a high street fashion chain in the UK; and GA Asset Advisors, a specialist restructuring group.
Story by Ciaran Hancock, Business Affairs Correspondent for the Irish Times on Tuesday 19th October 2011 http://www.irishtimes.com/newspaper/finance/2011/1019/1224306073429.html