UK electrical group offloads leisure division

UK electrical goods group Alba today agreed to offload household brands including Breville and Dirt Devil in a £51.5m (€75m) deal.

The sale of Alba’s leisure division will see private equity group Rutland Partners snap up a portfolio of brands including kitchen equipment maker Breville, Nicky Clarke electrical hair products, JCB power tools and Dirt Devil vacuum cleaners.

The move follows a restructuring of the group last year – which split the business into separate leisure and consumer electronics divisions – in an attempt to tackle falling sales amid heavy competition.

Alba said the sale will allow it to concentrate on its audio-visual business, which includes its Grundig, Bush and Alba brands. It plans to use the proceeds of the sale to cut the company’s debts.

Alba distributes its own branded and licensed electrical products to retailers in the UK and Europe, including licences for brands such as Antony Worrall Thompson kitchen products and Ministry of Sound music equipment.

The Hertfordshire-based company, which posted pre-tax losses of £44 million in the year to March 31, said sales slid 36% in the three months to the end of June, but said it had seen recent improvement in margins.

It added the performance was in line with its expectations which forecast a fall in revenues but a recovery in margins over the year following the structural changes to the business.

Rutland Partners said it will seek to invest in and expand the brands in the portfolio.

It added it will retain the company’s base near Manchester following the sale, which it does not expect to result in any job cuts. The division employs around 225 staff.

Rutland’s recent investments have included clothing retailer Edinburgh Woollen Mill, pawnbroking chain Harvey & Thompson and musical instrument manufacturer The Music Group.