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Non-public fairness agency Cinven has agreed to promote upmarket British shoe model Kurt Geiger to New York-listed trend group Steve Madden for round £289mn, in a deal that underlines the problem of buyout investments in European trend companies.
The UK-headquartered buyout group purchased the corporate for about £245mn virtually 10 years in the past, which means it grew the worth by 18 per cent throughout its possession. Buyout teams often goal to multiply the worth of the companies they personal inside a typical span of 5 years.
The sale of Kurt Geiger, which was based in 1963 on London’s Bond Road, marks the most recent trend funding in Europe to underwhelm after the sector was hit by the pandemic and weak shopper spending.
“It has been a privilege to help such an iconic firm, and we look ahead to seeing the model proceed to thrive in its subsequent chapter,” stated Maxim Crewe, Cinven’s head of shopper and monetary providers.
Kurt Geiger, greatest recognized for prime heels that it sells underneath its personal identify in addition to the Carvela model, has greater than 70 shops throughout the UK and US, and in addition operates in Europe, the Center East and Asia.
Cinven stated throughout the interval of its possession, Kurt Geiger had expanded its worldwide presence and on-line gross sales.
An individual acquainted with the enterprise stated income was round £400mn within the 12 months to January 2025, up 42 per cent in contrast with the 12 months to December 2015, when Cinven agreed to purchase the corporate.
The pandemic led to a closure of shops whereas the development to work at home led to individuals shopping for fewer sneakers and purses, they stated. However exercise had since recovered to above pre-pandemic ranges.
Amongst personal fairness investments in European trend teams which have struggled, Dr Martens is now buying and selling at 80 per cent under its worth when it was floated by Permira in 2021.
The buyout group canned an IPO of luxurious sneaker retailer Golden Goose final 12 months after bookrunners steered it might worth close to the underside of a beforehand anticipated vary. Apollo agreed to take possession of luxurious streetwear retailer Finish Clothes from fellow personal markets agency Carlyle as a part of a restructuring.
Broader challenges confronted by personal fairness companies in search of to exit companies have been additionally highlighted on Thursday as HBX Group, a resort room wholesaler through which Cinven is without doubt one of the shareholders, fell as a lot as 11 per cent throughout its preliminary public providing in Spain.
Increased rates of interest since 2022 have contributed to a drop in firm valuations and brought about a chasm on worth between sellers and potential consumers. Whereas charges have since fallen, a post-pandemic slowdown in IPO markets has continued to hamper a key portfolio firm exit route.
