MBO group buys A-Wearfor €70m

Fashion retailer A-Wear was sold yesterday by Brown Thomas to a management buyout group backed by Alchemy Partners, a British private equity company.

The sale price was not disclosed, but it is believed to have been just over €70 million. The deal is subject to approval by the Competition Authority, which is expected to make its decision in the next few weeks.

It is understood that the management team, led by managing director Annmarie Flood, has a small equity stake in the takeover company, with Alchemy providing most of the funds for the transaction. Ms Flood declined to comment on the deal.

Alchemy was formed in January 1997 and is led by managing partner Jon Moulton. The private equity group has advised on more than 100 transactions that involved £1.6 billion (€2.35 billion) of equity investment.

Alchemy has invested in Ireland before. In April 2003, it contributed $88 million to the $393 million taking private of Barry O'Callaghan's e-learning group Riverdeep from the Irish Stock Exchange. It exited 12 months later during a refinancing, doubling its money in the process.

Dublin-based businessman Pierce Casey is a director with Alchemy Venture Partners. No comment was available from Alchemy.

A-Wear was founded in the 1960s and was originally known as Gay Wear. Specialising in women's clothing and accessories, it operates from 28 stores - 25 in the Republic, two in Northern Ireland and a concession in Selfridges' store in Birmingham.

A-Wear is believed to have had earnings before interest, tax, depreciation and amortisation of about €9 million on turnover of close to €70 million in the year to the end of January 2007.

The retailer opened one new store in 2006, at the newly-built Whitewater shopping centre in Newbridge, Co Kildare. No new stores were planned by Brown Thomas for this year, although the new owners are expected to grow the numbers of outlets over the next few years.

The decision to sell is believed to have been influenced by upcoming rent reviews that are expected to substantially increase A-Wear's cost base.

The fashion chain has also faced increased competition locally, with overseas rivals Zara and H&M successfully entering the Irish market in recent years.

Galen Weston, chairman of the Brown Thomas Group, said he was delighted that its management team would continue to play a role in its future growth.

Corporate finance house Key Capital in Dublin advised Brown Thomas on the sale, along with law firm Matheson Ormsby Prentice. Arthur Cox provided legal advice to Alchemy.

Other bidders reported to have expressed an interest in acquiring A-Wear included PCP One, a consortium backed by Bernard McNamara, which owns Champion Sports; Iceland-based investment group Baugur; and Seán Barron, who controls the Pamela Scott fashion retail business.