Hilco Capital reportedly exploring Cath Kidston sale
Thu, 16 Feb 2023 | BUSINESS SALE
UK high street investor Hilco Capital is reportedly exploring a sale of homewear retailer Cath Kidston, just eight months after acquiring the business. According to city sources quoted by Sky News, Hilco is lining up PricewaterhouseCoopers (PwC) to advise on a potential sale of the brand.
It is so far unclear how a potential sale of the brand would be structured, if Hilco would pursue a full sale of the company or what kind of valuation would be attached to the retailer. It has been reported that Hilco has already been approached by several potential buyers.
Hilco Capital acquired Cath Kidston from previous owner Baring Private Equity Asia (BPEA) in summer 2022. The business is an operating arm of Hilco Global and is known for its investments in distressed UK high street retailers.
The firm owns well-known brands including Homebase and HMV and in 2022 invested £40 million in discount retailer Wilko, which announced earlier this week that it would cut over 400 jobs as it looks to control costs.
Cath Kidston was founded by the designer of the same name in 1993, going on to become a major UK retailer, with an extensive high street presence. Like many high street giants, the company was severely impacted by the COVID-19 pandemic and enforced closure during lockdown.
This exacerbated existing issues at the retailer, which had been in the midst of a turnaround plan when the pandemic struck. The company last filed accounts at Companies House for the year ending March 25 2018, reporting a £10.5 million EBITDA loss, which it blamed on upward cost pressures and adverse market conditions.
The company entered administration in April 2020, undergoing a pre-pack administration which resulted in the closure of all 60 of its UK high street locations, with the business continuing to trade online and via wholesale and franchise outlets. The retailer also has more than 100 international locations.
Read more about how the decline of the UK high street is shaping M&A activity.
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