CD&R to launch bid for fashion chain New Look: reports
05 May 2015
Investment firm Clayton Dubilier & Rice (CD&R), with supermarket supremo Sir Terry Leahy among its advisers, is reportedly preparing to launch a bid for high street fashion chain New Look.
The private equity firm, which former Tesco boss Leahy joined in 2011, had been in discussion with Chinese group CDH to launch a bid for the retailer, which could be worth up to £2 billion, according to Sky News.
The fashion chain, with current owners, private equity firms Apax and Permira and founder Tom Singh, hired JP Morgan in February to assess a potential float of the company - its second attempt in recent years after investors in 2010 found its debt level too high.
It emerged, backers were considering plans for offloading the chain, with potential interest from a number of Chinese firms last month, including Thomas Cook backer Fosun and Citic Capital as well as CDH.
The report said CD&R and CDH were now talking over a potential joint bid.
New Look counts China as one of its key markets, and operates about 18 stores in the country. The company also sells clothing through Alibaba's popular Tmall website, with about 180 million buyers.
New Look boss Anders Kristiansen also had vast experience in the Chinese consumer market, with establishment of 5,500 Bestseller Fashion Group stores in the country as chief executive of the Danish fashion group.
The discussions between CDR and CDH had not yet led to a definitive agreement to bid, but according to commentators, they underscored the growing influence of Chinese investors in deals involving major Western brands.
In the case of New Look, the involvement of CDH reflected the future importance of China as a market for the chain, whose chief executive had set a target of 70 stores in the country by the end of the financial year.
CDH had acquired stakes in several Chinese companies, including China's biggest milk producer, Mengniu Dairy and Belle International Holdings, a women's shoe retailer.
