Tom Hunter mulls potential £200m sale as interest grows in Office arm

Published on Wednesday 30 June 2010 22:26

SIR Tom Hunter has appointed advisers to consider a £200 million sale of his Office fashion and sports footwear retail chain.

Corporate finance firm Hawkpoint and US boutique investment specialist firm Financo will advise on options for the business, which was acquired by the Scottish tycoon's West Coast Capital private equity business in 2003. WCC has received a number of unsolicited approaches to acquire Office in recent months.

The move coincides with, but is unrelated to, WCC agreeing a three-year banking facility with Lloyds Banking Group.

WCC previously had a one-year rolling facility and the new arrangement provides greater flexibility for all WCC's assets held through WCC Trading, WCC Holdings and WCC Retail embracing more than 50 companies.

Under Hunter's ownership, Office has more than trebled its store portfolio to 124, including concessions. It is understood that Office's chief executive, Brian McCluskey and the management team would like to remain with the business, which is expected to report Ebitda (earnings before interest, tax, depreciation and amortisation) of 18.6m on turnover of 145.7m when its figures for the year to the end of January are published.

Office, which is popular with celebrities, is said to enjoy significant sales and profit growth in the UK and online. McCluskey has also put in place the foundations to take the business into Europe. In collaboration with Topshop, Office recently opened a concession in Topshop, New York.

"We believe we've appointed the right advisers to help us assess all our options," he said. WCC has held the business for seven years now so this is timely in the lifecycle of private equity particularly given we have received several unsolicited approaches for the business. Hawkpoint and Financo will also review growth options for us as well as a possible sale."

Office has concessions in Selfridges, House of Fraser, Harvey Nichols and Topshop. The Office web business has doubled year-on-year growth and is now being geared up for major European expansion shortly to be announced alongside further UK store openings. The chain was launched in 1981.