Firms create consortium to bid for well-heeled retailer New Look

BIDS for fashion retailer New Look, which employs about 300 people in Ireland, have reportedly been received from two of the world’s largest buy-out groups.

American private equity firms Texas Pacific Group and Warburg Pincus are believed to have formed a consortium to bid for the fashion retailer, which has 40 stores in the Republic and Northern Ireland.

Sales at New Look are understood to have reached more than £1 billion (€1.46bn) in the year to March 2007, showing an 18% increase.

The company were unable to provide exact sales figures for their Irish stores, which are understood to be performing well.

New Look is attracting much interest from potential bidders since it announced it was for sale for £2bn last month.

At least six bidders have already made contact with the fashion chain.

The private equity firms Apax and Permira, which took New Look private for £700m in 2004, appointed Merrill Lynch to advise on a flotation earlier this year.

But the company was forced to drop its plans and opt for a sale after the poor performance of two recent market entrants, Debenhams and Sports Direct.

The investment banks Morgan Stanley and Citigroup are understood to be advising the Texas Pacific/Warburg Pincus consortium, two groups which have worked together on retail deals in the past.

Others believed to be interested are private equity firm CVC Capital, buy-out firm Blackstone and Landmark Group, the Dubai-based group in charge of New Look’s franchise operations in the Middle East and India.

Its chief executive Mahesh Jagtiani already owns 3% of the chain.

Profits at New Look, which has expanded into menswear and childrenswear, rose from £174m (€255m) to about £180m.

Texas Pacific was the biggest investor in the consortium that won the contested battle for Debenhams in 2003.