White Stuff founders hold on to the right stuff

Not being able to secure the price you’d expected for your business is undoubtedly frustrating, but sometimes it can be a blessing in disguise

It’s been a buyer’s market in M&A deals for a while now, so it’s inevitable that there are a fair few founders holding on to their businesses for longer than they’d planned, or “seven years into the five years plan”, as one entrepreneur put it to me last week.

Not being able to secure the price you’d expected for your business is undoubtedly frustrating, but sometimes it can be a blessing in disguise. Last year, the founders of lifestyle retailer The White Stuff attempted to find a buyer for part of their 80% stake in the business but it wasn’t long before they were calling off the search.

Lack of interest wasn’t a problem. Private Equity Partners, renowned for investing in entrepreneurial retail businesses, were reportedly close to sealing a deal last June, but couldn’t match founders George Treves and Richard Thomas’ £80m price tag for a 20% stake.

Instead of accepting a lower offer and heading back to the Alpine slopes from which they started the business 20 years ago, when they sold t-shirts to fund their ski-bum lifestyle, they considered the 47 shops, mail-order catalogue business and a diversified clothing range they’d built and decided to press on alone.

It might have been poor timing in terms of depressed valuations in the acquisitions market, but the downturn has done little to harm White Stuff, and Treves and Thomas must be delighted with the prescient call they made last summer.

The firm has reported record profits for the last financial year.

Turnover rose 34% to £58.4m, with home-shopping sales up 70% and underlying profits rising by 42% to £13.3m.

Despite the impressive sales growth, the company even managed to increase its margins slightly, which were up by just over 1%.

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White Stuff now has 60 stores and is planning 30 more over the next three years. Its “lovely clothes for lovely people” slogan betrays its ‘yummy mummy’ target market, a stylish crowd who are proving resilient in the recession.

Its success is also a testament to the power of diversification – White Stuff’s focus on ski and surf clothing has given way to a lifestyle brand that positions it as a serious competitor to Gap.

Unsurprisingly, there are no immediate plans to revisit the sale plan, with The Sunday Times reporting that a strategic review will take place in two years. When you’re running one of the fastest growing private firms in the UK, you needn’t be in any hurry to sell up, and it doesn’t look like Treves and Thomas will be returning to the slopes any time soon.


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