Private equity firm 3i has ordered a root and branch review of womenswear retailer Hobbs ahead of a major financial restructuring.
3i, which controls about 80% of Hobbs via its buyout fund Eurofund IV, has appointed corporate adviser Hawkpoint to scrutinise the chain’s balance sheet and conduct consumer insight research.
The private equity firm is expected to increase its own capital investment in the retailer following the review, and to simplify Hobbs’ shareholding structure by acquiring the stakes of any former directors.
It has batted away suggestions it could reduce its stake or divest the retailer altogether.
A spokeswoman said: “3i believes in the business still and wants to help it grow.
“We don’t yet know what shape that [help] will take but further capital investment is definitely an option.” Hobbs, which comprises 59 standalones and 65 concessions, came under the control of 3i in 2004 in a deal which valued the retailer at £111m.
It directly owns a 42% stake, and manages funds which own additional stakes totalling about 40% through Eurofund IV.
The remainder is held by management, former directors and their families, thought to include the family of former chief executive Nick Samuel, who died in June.
3i has commissioned the consumer insight survey to help it better understand its offer and sub-brands, which include its younger range NW3 and Limited Edition collection, and to identify any opportunities to expand or add ranges.