LONDON — New Look, the British high-street retailer, is preparing to go on the block.
The company has appointed Merrill Lynch as financial advisers before it is put up for sale by private equity firms Apax and Permira, its majority shareholders, a spokesman said.
Experts have estimated that New Look could be sold for between 1.6 billion pounds and 2 billion pounds, or $3.14 billion to $3.92 billion at current exchange rates.
New Look’s appointment of financial advisers comes after reports in the British press last month that the retailer had received several unsolicited approaches from private equity firms, which were said to have included KKR, Texas and Bain Capital. No formal bids have yet been made for the company, the spokesman said.
New Look is the third largest women’s wear retailer in the U.K. by market share and reported sales of $1.69 billion for the fiscal year to March 2006. The company was taken private in 2004 by its founder Tom Singh, who led a buyout backed by Apax and Permira for 700 million pounds, or $1.4 million. Singh, now a nonexecutive director at the company, still holds a 23 percent share in the business. Apax and Permira hold a combined 66 percent share.
Since its 2004 buyout, the retailer has increased its retail space by 25 percent and has 766 stores across the U.K., France, Belgium and Dubai, with stores in Saudi Arabia and Kuwait set to open this year. It also plans to open 40 New Look stores across the Middle East over the next five years with Landmark Group, its franchise partner in the region. Reports have indicated that Landmark Group, which owns a 3 percent stake in New Look, may also make a bid for the company.
In addition to expanding internationally, New Look has also boosted its fashion credentials in the past year. This month the company launched Gold, a capsule collection with British designer Giles Deacon, and in May it will launch a one-season range of dresses designed by British pop singer Lily Allen.