Crew Clothing, the active casualwear brand founded by Alastair Parker-Swift in 1993, has sold a 25 per cent stake in the business to ISIS Equity Partners. The brand currently generates a profit before tax of £1.8 million on sales of £13.5 million from 34 retail outlets, a wholesale business and direct arm.
On the back of the investment, the company has been successful in attracting Peter Davies as chairman. He brings with him experience gained at Arcadia and Rubicon Retail and is currently chairman of Clarks Shoes. ISIS will be represented on the board by Andrew Garside, who led the investment on its behalf alongside debt facilities provided by Lloyds TSB Corporate. On joining the business, Davies said, “This is a great opportunity, with Crew Clothing well positioned in the market and in a strong growth phase. The plan to double the size of the estate looks very achievable, we have a strong team in place and with the product going from strength to strength, we will be appealing to a wider audience.” The investment is helping Crew Clothing expand its team further with current vacancies for a merchandiser and head of womenswear and the recent appointment of a new finance director.
James Pascoe, Crew Clothing’s operations director, told CEB of Crew’s plans for the near future, including the launch of a childrenswear range in the spring. It will be predominantly a mail order brand and will have its own catalogue, Crew Kids, though will not feature heavily in stores. The company also plans to expand its franchise business and further build on its wholesale and direct divisions. “Customer acquisition to date has mostly been ‘organic’,” said Pascoe, “At the moment we’re seeing 50 per cent growth in the direct business without actively recruiting customers. We are now going to look
at acquiring customers more aggressively.” On the infrastructure to support the growth of the business, he said, “We have already put in place a scalable eCommerce platform and it will just be a matter of fine-tuning it.”
Currently, direct sales represent 10 per cent of the business and the figure is unlikely to change significantly following the investment said Pascoe, as retail growth will also be accelerated over the coming months.
Meanwhile, Sir Tom Hunter’s private equity partnership, West Coast Capital has acquired a 29.9 per cent stake in Flying Brands. Hunter was most recently involved in the acquisition of House of Fraser by the Baugur Group and Wyevale Garden Centres. Under the name TBH Trading Ltd, West Coast has bought the shares of chairman Paul Fraser and Sussex Trading Company Ltd (of which the owner is Stewart Newton, a non-executive director of Flying Brands) reducing their shareholding to 4.34 per cent and 2.96 per cent respectively. As a result of the transactions, Jim McMahon and Paul Davidson from West Coast will join the board of Flying Brands as non-executive directors and Stewart Newton will leave the board with immediate effect. Paul Fraser remains as chairman until early into the New Year, after which he will step down as chairman and from the board. An independent chairman will be appointed in due course.
Mark Dugdale, chief executive, Flying Brands, said, “We welcome West Coast Capital as a new shareholder and their involvement in our business. They bring with them both expertise and a range of opportunities that we believe we can profitably exploit for the benefit of all shareholders. This will help Flying Brands fulfil its potential.” He told CEB, “This is an exciting development, the market follows what Tom Hunter does and if he’s interested in our business it might make people say, ‘well look at that…’”
In a trading update issued at the same time, Flying Brands confirmed that trading across divisions has been “mixed”. While the gifts division was performing well
after its acquisition of Greetings Direct, the garden division is currently “behind management’s expectations and the record performance achieved in the same period last year.”
As a consequence, the company anticipates that year-end results will be below market forecasts, though the final outcome depends on the performance of the group over the Christmas period.
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