News Column

Fat Face and PizzaExpress up for auction

May 2, 2014

Zoe Wood



Fat Face and PizzaExpress are the latest consumer brands to go under the hammer as private equity firms look to cash in on rising consumer confidence and buoyant financial markets.

Buyout firm Bridgepoint has pressed the button on a stockmarket listing that values Fat Face, started by ski bums Tim Slade and Jules Leaver to subsidise their life on the slopes, at about pounds 440m. Meanwhile, private equity firm Cinven is testing buyers' appetite for the near-500-strong restaurant chain PizzaExpress. With a mooted price tag of more than pounds 1bn, the sale would signal a breakup of the Gondola Group, which also owns ASK Italian and trendy burger chain Byron.

Fat Face boss Anthony Thompson, who was parachuted in to lead a turnaround in 2010, said the business was now in rude health, with plenty of scope to expand both in the UK and overseas. The US is top of the list, with a website due to launch there within the next 12 months, followed by a handful of stores in the Boston area. The former Asda and Marks & Spencer executive has overhauled the firm's clothing range and sought to cement its appeal as a family retailer - the average age of its shoppers is 41 - rather than chase younger customers, as it had in the past. His formula has worked, with like-for-like sales up 8.4% in the 35 weeks to 1 February. Pre-tax profits rose 28% to pounds 32m.

Fat Face joins a wave of retailers coming to the market. Appliances Online, Pets at Home and Poundland have recently tapped investors to take advantage of booming stock markets and renewed confidence on the high street. The IPO triggers a long awaited payday for Bridgepoint, which bought Fat Face for pounds 360m at what turned out to be the peak of the buyout market in 2007. Two years later it was forced to inject more funds as part of a refinancing that helped reduce the retailer's substantial pile of debt.

The sale to Bridgepoint netted pounds 90m for Slade and Leaver. Today Bridgepoint owns 70% of the company, while the founders have just 0.2%. Bridgepoint and senior management, who own 20%, are in line for multimillion-pound pay outs as they plan to sell some of their holdings.

The PizzaExpress auction is being run by Goldman Sachs. Founded in 1965, the restaurant chain has changed hands several times, with Cinven buying it for euros 1.3bn at the end of 2006. With a turnover of more than pounds 600m in the year to 30 June 2013, the company fell to a pre-tax loss of pounds 79m after pounds 110m of interest payments on its pounds 1.2bn debt mountain.

Captions:

Fat Face is valued at around pounds 440m, while PizzaExpress is expected to fetch about pounds 1bn Photograph: Dave Jepson/Alamy


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Source: Guardian (UK)


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