Retail entrepreneur Sir Tom Hunter is understood to have rebuffed a number of unsolicited approaches for young fashion footwear chain Office, which he owns via his West Coast Capital private equity partnership.
According to reports, West Coast Capital received offers for the business of between £110m and £120m from a private equity firm and a trade buyer.
However, sources told Drapers that the Scottish tycoon was unlikely to sell for up to two years and that a minimum valuation of the business at the current time would be about £150m - eight times its EBITDA of £18.5m in the year to January, up from £10.5m the previous year.
Hunter bought Office from its co-founder David Casey in 2003 for about £15m. At that time the chain was making a pre-tax profit of just over £2m.
A private equity source said that while West Coast Capital had owned the footwear chain for seven years, it had planned for up to a 10-year exit window.
The source said: “West Coast is under no pressure to sell. It isn’t pursuing the two approaches. Tom would probably look to sell in a couple of years’ time.”
The source added that West Coast Capital felt the bids undervalued the business, which is understood to have continued to trade ahead of last year in profit terms since its year end.
“If you look at Pets at Home [the UK chain that was sold for £955m in January to private equity firm KKR], it went for a multiple of 11.5 times EBITDA. West Coast could wait for retail multiples to come back,” said the source.
It plans to open an additional six concessions in House of Fraser this year and six more standalones. Office has also begun exploring the possibility of a roll-out into Europe in countries such as Germany, the Netherlands and Belgium, as well as Scandinavia.
However, the chain is expected to open up its website to European shoppers within the next 12 months to test shopper appetite before opening a bricks-and-mortar operation overseas.