La Senza, the embattled high street lingerie retailer owned by consumer-focused private equity firm Lion Capital, has come to an agreement with Alshaya that will see the Middle Eastern retail group rescue the company’s UK operations in a pre-pack administration deal.
Under an agreement with KPMG, the company’s administrator, the UK arm of Alshaya will gain exclusive franchise rights for the La Senza brand in the UK. Alshaya will acquire 60 of La Senza’s 146 stores and will secure around 1,100 of its 2,600 jobs.
The deal and subsequent plans for the business, which include new product collections and store redesigns, represents a planned investment of around £100m in the UK retail sector over the next two years by Alshaya.
The move will further deepen Alshaya’s long-standing links with the UK. The group is the international franchise partner for a wide range of British retail brands including Mothercare, Debenhams, Boots, Next, River Island, Topshop, Miss Selfridge and The Body Shop.
Through franchise agreements elsewhere in the world for the Victoria’s Secret, Bath & Body Works and La Senza brands, Alshaya already has a strong partnership with Limited Brands, the US-based owners of the La Senza brand. The two companies will work together closely on delivering an enhanced La Senza’s business in the UK, the company said in a statement.
Lion Capital appointed KPMG last month to advise the struggling retailer on a range of restructuring options, in a move reflecting a wider pattern of economic gloom on Britain’s high streets.
The news follows a wave of UK retail administrations and sell-offs, including shoe chain Barratts Priceless and outdoor clothing retailer Blacks Leisure, which is currently being eyed by majority shareholder Sports Direct.
According to Lion’s website, La Senza posted sales of £140m last year. The London-based firm bought the company for an undisclosed amount in 2006, when it employed 1,800 people in the UK and Ireland and generated £94m of turnover.
Copyright © 2012 AltAssets
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