A British heritage retail chain has been rescued by private equity in a last minute pre-pack administration deal. Jones Bootmaker was almost destined to go under until private equity firm Endless was able to make a deal with the retailer’s current private equity owners, Alteri.
The Leeds-based private equity firm had reportedly been talking to the distressed company since last week. But on Friday, Jones Bootmaker’s owners informed the company had entered administration and the expectations of a deal dropped. However, Endless has now announced it’s acquiring the heritage brand.
Andrew Smith, partner at Endless, said in the official statement, “Jones is a well-known and loved brand on the UK high street. We recognise that there is a lot of work to be done to transform the Company to secure long-term stability for the business and its employees but we are delighted to be working with the team and can see the opportunities for an exciting future.”
Retailer in trouble
The iconic brand has been suffering in recent months. Alteri bought the company, together with its sister company Brantano, in October 2015. The sister company went into administration about four months later, although Alteri bought some of it back soon after.
The private equity firm announced the retailer was struggling due to “difficult trading conditions” and Brantano was placed into administration last Wednesday. Jones was thought to have the same fate until the pre-pack administration deal was reached.
Under the deal, the sale can go through swiftly and it allows Jones to write off its debt and close the loss-making parts of the business. While Endless is able to keep a large number of jobs that were feared to be lost, the retailer will close a few stores on the British high street.
Steve Absolom, appointed from KPMG as the joint administrator, commented on the job situation by stating, “While it is always pleasing to preserve a significant number of jobs, sadly a number of redundancies are to be made at the closed stores.”
The Telegraph reported the retail chain to have 25 underperforming stores and six concessions, which are not part of the new deal. Closure of these stores will result in around 262 job losses, while over 800 jobs are to be saved.
Increasing its retail investments
According to the Financial Times, the deal has cost Endless around £11 million. The deal sees the private equity firm enhance its portfolio with another retailer. Its previous investments in the sector include The Works Stores, Bathstore.com and The West Cornwall Pasty Company.
It has some experience in the footwear sector, as the private equity firm’s former ownership was one of Britain’s largest footwear distributors, Peter Black International.
The private equity sector has witnessed a number of pre-pack deals. These include the sale of lingerie firm Agent Provocateur to Sports Direct at the start of March. Bernard Matthews, famous for its turkey products, was also sold in a controversial pre-pack deal last year. The sale caused an outcry because the pre-pack deal didn’t include liabilities such as the company’s pension scheme.