OpCapita said March 25 that agreed to buy a majority of Maurices. The transaction has an enterprise value of $300 million. Ascena retail group inc, the parent, is retaining a stake. Maurices, of Duluth, Minnesota, is a specialty hometown retailer that aims to bring affordable, versatile, and flattering clothing to women in small towns across the U.S. and Canada. PJ Solomon provided financial advice to OpCapita, while Clifford Chance US LLP acted as it its legal counsel. Guggenheim Securities is financial adviser to ascena and Proskauer Rose LLP is serving as its legal counsel.
OpCapita Agrees to Acquire Majority Stake in maurices
Firm’s First Investment in the United States Made in Partnership with Management Team
Former Gap Brand President and CEO Jeff Kirwan to Be Executive Chairman of maurices
maurices’ Current Parent Company, ascena retail group, to Retain Significant Minority Stake and Provide Certain Support Services
LONDON, March 25, 2019 – OpCapita Consumer Opportunities Fund II LP, advised by OpCapita LLP (“OpCapita”), a private equity firm specializing in the operational improvement of businesses in the retail, consumer and leisure industries, today announced that it has signed a definitive agreement to acquire a majority equity stake in Maurices Incorporated (“maurices”), a specialty retailer focused on women’s value apparel. maurices’ current parent company, ascena retail group, inc. (Nasdaq: ASNA) (“ascena”) will retain a significant equity interest in the business and will continue to provide brand support services. Certain members of the maurices management team will invest alongside OpCapita in the transaction, which values maurices at an enterprise value of $300 million.
Founded in 1931, maurices is a specialty hometown retailer committed to bringing affordable, versatile, and flattering clothing to women in small towns across the U.S. and Canada. Based in Duluth, Minnesota, with over $1.0 billion in revenue in 2018, maurices’ product range includes women’s casual apparel, career wear, dressy wear, active wear, shoes, and accessories.
maurices will continue to be led by George Goldfarb, President and Chief Executive Officer, and its current management team. Jeff Kirwan, the former President and CEO of Gap brand who has extensive experience in large-scale specialty apparel retail, will join maurices as Executive Chairman. The maurices management team will be supported by OpCapita’s investment team, as well as a dedicated team in the U.S.
Henry Jackson, Chief Executive of OpCapita, commented: “We believe there is a real opportunity to increase the profitability of maurices through hands-on operational improvement. We firmly believe that our consistent focus on operational discipline is a key differentiator embedded in the heart of our organization, and one we look forward to implementing at maurices. As we establish maurices as an independent stand-alone company, we welcome the continued support of ascena through their retained stake and the range of services they will provide.”
OpCapita has considerable expertise in value apparel retail, most notably demonstrated by its successful turnaround of NKD, a leading European value clothing retailer operating approximately 1,800 stores, which it sold to funds advised by TDR Capital on 19th March 2019. Under its ownership, OpCapita significantly improved the profitability of the business through operational improvements, seeing NKD restored from a heavily loss-making enterprise at the time of initial investment in 2013 to one generating significant earnings.
George Goldfarb, President and Chief Executive Officer at maurices, said: “Our management team is very enthusiastic about this next chapter for maurices, which will enable us to realize our full potential and compete most effectively as a specialty hometown retailer. OpCapita’s world-class team brings extensive operating, retail, and financial capabilities and can provide substantial insights and day-to-day assistance that will help maurices create enhanced value. We are also very pleased to welcome Jeff to our team and look forward to benefitting from his industry knowledge and the fresh perspective he will bring to maurices. We have a clear vision for the future that we expect will strengthen our ability to create attractive opportunities for our associates, customers, and other business partners.”
Chris McDermott, Managing Director at OpCapita, commented: “We believe maurices represents a compelling opportunity in the U.S. market with clear parallels with other OpCapita investments. The business provides a strong platform from which to apply the operational improvement strategies we have successfully implemented to drive growth and improve profitability in other businesses.”
Jeff Kirwan said: “It is an honor to join maurices upon the closing of the transaction as it embarks on this next phase of growth. This transformative investment by OpCapita will enhance maurices’ differentiated market position as a value retailer with a well-priced and relevant product assortment and a significant opportunity for omni-channel customer engagement. I look forward to working closely with George and the management team.”
The maurices transaction is expected to be completed by early summer and is subject to customary closing conditions and approvals. The transaction does not require approval by ascena stockholders.
PJ SOLOMON is acting as financial advisor to OpCapita and Clifford Chance US LLP is serving as its legal counsel. Guggenheim Securities is acting as financial advisor to ascena and Proskauer Rose LLP is serving as its legal counsel.
Founded in 2006, OpCapita is a private equity advisory firm specializing in transforming operationally underperforming businesses in the retail, consumer and leisure industries. The funds it advises actively invest in companies where there is an opportunity to deliver improvements in profitability and create long-term, sustainable value.
OpCapita’s team of in-house operating partners has decades of experience in consumer-facing businesses and a widespread network of contacts and specialists. The team adopts a hands-on approach to the companies in which it invests, drawing on exceptional management talent to deliver on its investments.
Over the past 13 years, OpCapita funds have invested approximately €600 million (approximately $675 million) in businesses in the UK, France, Germany, Italy and Spain. OpCapita closed its second dedicated fund, OpCapita Consumer Opportunities Fund II LP, on €350 million (approximately $393 million) in 2016 and was significantly oversubscribed.