Sir Tom in £20m link up with USC chain

Published on Friday 25 August 2006 12:05

SCOTTISH retail tycoon Tom Hunter's West Coast Capital investment vehicle is to plough more than £20 million into fashion chain USC.

The cash is to be used to develop the Livingston-based brand, which has 60 stores across the UK, including on Princes Street, and open a further ten to 20 new stores.

The news came as Edinburgh's Jenners and House of Fraser stores were snapped up in a 351m deal with Icelandic company Baugur, in which Sir Tom will take an 11 per cent stake.

Sir Tom said that a "leading figure in e-commerce", headhunted from a major British company, would be drafted in to help boost USC's online sales.

The new recruit will also work across the company's portfolio of business interests, mainly made up of property and retail.

As well as USC, which sells numerous youth-oriented brands including Diesel, Ted Baker, Miss Sixty and Firetrap, Sir Tom, who is Scotland's richest man, owns shoe chains Office and Qube as well as the D2 clothing chain.

Jim McGonigle, managing director of USC, said: "Given the quality of our brands we believe we can make a compelling online offering to our customers.

"Historically we've taken a modest contribution from that side of the business, but with a substantial investment in both marketing and technology we know we can take a significantly higher share of the online fashion market."

Sir Tom bought Livingston-based USC in 2004 for 50 million from Angus Morrison and David Douglas, who founded the firm in 1989. He later bought out venture capitalist Bridgepoint, which had a 40 per cent stake in the business.

A spokesman for West Coast Capital added: "We invest for the long term in growth businesses. USC has increased its market share substantially since we acquired it and we see continued growth both in its online business and through the stores.

"To facilitate that growth we will continue to invest heavily in the business."

It is also believed that some of the 20m investment could be used to exploit the cross-selling opportunities that Sir Tom's other retail interests could have with House of Fraser.

Meanwhile Baugur - the investment group that owns fashion brand Oasis and Goldsmiths jewellers - will own 35 per cent of House of Fraser, with the rest divided among its consortium members, which, as well as Sir Tom, include Don McCarthy, who runs the Shoe Studio group and FL Group, which owns the Icelandair airline.

Sir Tom, whose stake in House of Fraser is worth 35m, is worth around 750m. He made his fortune with the 290m sale of Sports Division in 1998.

Earlier this year, he bought the UK's biggest garden centre chain - Wyevale Garden Centres - for 445m. In early 2003, he made an initial attempt to buy House of Fraser - putting in a 200m bid which was rejected.

He also tabled 540m for London-based department store Selfridges in May 2003, but was pipped at the post by Canadian billionaire Galen Weston, the owner of luxury food store Fortnum & Mason.