Sir Tom Hunter rescues Cruise in new retail joint venture

Published on Wednesday 29 December 2010 22:17

CASH-Laden entrepreneur Sir Tom Hunter has completed the acquisition of fashion chain Cruise from administrators in a move that will save 300 jobs.

• Fashion chain Cruise is left with ten stores

The sum he paid was undisclosed but is understood to be in the region of 6 million.

The deal, first outlined at the weekend, has saved ten stores in Scotland and England - although two stores were closed, in Dundee and Livingston, with the loss of 18 jobs.

The chain was bought by business restructuring specialist Hilco from HBOS earlier this month, but then went into administration after a buyer failed to materialise. The firm was bought by Hunter immediately after it went into administration on Wednesday.

The Scots businessman beat a rival bid for the business from JD Sports.

A spokesman for Hunter said the fact that he won the deal meant the headquarters for the firm "will most resolutely be in Scotland for sure".

The acquisition follows sales of assets by Hunter in recent weeks. Last month he sold shoe store chain Office to European private equity firm Silverfleet Capital for 150m, and his investment firm is also understood to have pocketed 30m from Wood Group's surprise 607m takeover of rival energy services company PSN, in which West Coast Capital had a stake.

Hunter, who founded the Sports Division chain before selling it to JJB for 295m in 1998, also announced the formation of a joint venture with Middlesbrough-based fashion retailer Van Mildert to "maximise opportunities in the luxury fashion industry".

Hunter said: "Cruise is an iconic brand that requires investment for growth. It's a business I'm delighted to invest in.

"Combining this acquisition with a partnership with Van Mildert, an exceptional fashion business in my view, offers a strong platform from which to build both businesses."

As part of the Van Mildert tie-up, the team there will oversee buying for Cruise. Hunter is now undertaking a strategic review of the Cruise business to develop a growth plan.

Van Mildert director Eric Williams said: "The Van Mildert brand has enjoyed robust trading over the last 12 months.

"It is flattering to have caught the attention of Sir Tom and his team and I am sure that this collaboration will inevitably lead to exciting new ideas about how we continue to take both brands forward."

Cruise has stores in Aberdeen, Belfast, Derby, Edinburgh (two stores), Glasgow (three stores), Leicester and Newcastle. Van Mildert has branches in Darlington, Durham, Harrogate, the Metrocentre and York.

Recent filings by administrators show that the failed Cruise chain faced claims from unsecured creditors totalling 7.9m.

John Reid, joint Administrator and head of Deloitte Restructuring in Scotland, said: "The company is in administration and is insolvent.

As such, creditors are unlikely to be paid in full; however, information will be provided to the creditors within the next few weeks."