Edinburgh Woollen Mill, the retail group run by billionaire Philip Day, has emerged as the frontrunner to buy the struggling fashion retailer Jaeger.
Industry sources say Edinburgh Woollen Mill, which owns an array of high street brands, is competing for the upmarket female clothing chain with other bidders, said to include Mike Ashley’s Sports Direct and Jaeger’s former owner Harold Tillman.
• READ MORE: Edinburgh Woollen Mill to buy Austin Reed brand
Sources close to the deal said the Scottish company is in pole position to buy the group from its current owner, the private equity firm Better Capital.
“Edinburgh Woollen Mill has a history of buying troubled retailers and turning them around, and it’s one of the more credible bidders for Jaeger,” one source said.
Day’s group has bought Jane Norman, Peacocks and Austin Reed out of administration over the past few years. Jaeger is believed to be valued at about £30 million by Better Capital, which is headed up by private equity baron Jon Moulton.
Better Capital acquired Jaeger for £19.5m in 2012, but the firm has struggled under difficult conditions for high street fashion retailers.
Last year the firm said that total annual sales fell from £84.2m to £78.4m, while it booked a pre-tax loss of £5.4m, according to accounts filed at Companies House.
It is reported that Better Capital has enlisted the services of AlixPartners to sound out potential buyers. Jaeger, which has around 25 standalone stores, was founded in 1884 by businessman Lewis Tomalin. All parties declined to comment.
Last November, Edinburgh Woollen Mill revealed it was looking to ramp up store openings after unveiling ambitious plans to relaunch the Austin Reed name on the back of solid full-year results.
The group bought the venerable fashion brand out of administration earlier in 2016 and now plans to invest £100m in a relaunch over the next three years.
Overall, Edinburgh Woollen Mill said it hoped to open 200 additional stores – including 50 Austin Reed outlets – by early 2018.
News of the accelerated opening programme came as the group, whose other brands include homewares retailer Ponden Mill and golfing brand Pro-Quip, announced strong like-for-like sales across all its brands in the year to 27 February 2016.
Total sales increased to £576.3m from £562.6m, with profits before tax and exceptional items nudging up 2.4 per cent to £90.9m. It opened a total of 43 stores in the UK and Ireland during the period.
On possible future acquisitions, Steve Simpson, commercial director of Edinburgh Woollen Mill, said at the time: “With the addition of Austin Reed, which we acquired earlier this year, as well as Country Casuals and Viyella, we aim to continue this organic growth, while always being ready to respond to other opportunities as they arise.”