It seems no one wants a New Look

In this age of disposable fashion, the UK has three major shops that keep those on a limited budget on trend: H&M, Primark and New Look. Despite a huge increase in column inches in the fashion press it seems no one wants to meet the £2bn price tag that Apax and Permira have put on the chain of shops. Warburg Pincus, TPG Capital and BC Partners withdrew from the auction process last night after a bid of a rumoured £1.7bn was rejected as it fell £100m short of the £1.8bn reserve.
Had the business sold for £2bn Apax and Permira, which bought New Look in 2004 for £699m with an investment of £150m each, stood to make a combined £1.3bn. Now the houses will be forced to opt for a refinancing instead. The collapse of the auction is also a blow for Merrill Lynch – a bank that has simply been unlucky with retail deals in the UK.

I think the business was just priced too dearly but perhaps the UK retail market is set for a downturn. The most recent statistics that I’ve found were released by the Treasury in mid-June which shows that, in fact, the UK consumer price index was down by 0.3% in May. And it goes on to say that the largest downward effects came from utility price cuts and falling prices on clothing and footwear. So no wonder no one wants to pay £2bn for New Look. It will be interesting to have a look at the summer’s figures but with horrible rainy weather and consistent terrorist treats. . .