Lion Capital LLP Exploring The Possible Sale of Dutch Retailer Hema

(Reuters) – Private equity group Lion Capital LLP said on Thursday it it had appointed Citigroup (C.N) and RBS (RBS.L) to explore a potential sale of retailer Hema, the second Dutch retailer placed up for sale this year.

Lion Capital bought Hema, a household name in the Netherlands, for an undisclosed sum in July 2007 from Dutch retail group Maxeda, and has since expanded the number of stores to 530 in five countries from 355.

The British-based private equity player said Hema has steadily grown sales since 2007, both through same-store performance and the expansion of its retail points.

“A review of the next 3-5 years points to significant further growth potential for the brand in both existing and new markets,” said Robert Darwent, partner of Lion Capital.

“We believe that now may present an appropriate time for Lion to explore an exit from the business.”

In March, the retailer reported operating income of 97.9 million euros ($124 million) over 2009 on a 3 percent rise in net sales to 1.1 billion, but recorded an 18.7 million net loss due to debt financing costs.

Hema is not the only Dutch retailer up for sale, however.

Maxeda, owned by Kohlberg Kravis Roberts (KKR.N), said last month a strategic review of options, launched in February, for its department stores chain V&D (including La Place) was progressing well.

Maxeda is also planning to review strategic “routes” for its fashion outlets de Bijenkorf, Hunkemoller and M&S Mode.

(Reporting by Aaron Gray-Block) ($1 = 0.7871 euro)