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Exclusive: Jack Wills seeks new owner

The private equity owner of Jack Wills, BlueGem, is searching for a new buyer for the retailer, while retaining a minority stake, Drapers can reveal.

A source close to the situation said BlueGem Capital Partners is trying to get rid of its majority stake and locate the “right kind of buyer”.

Jack Wills said it has appointed KPMG to carry out a review of the business and explore future opportunities. A spokeswoman added: ”In the meantime, management remains focused on its strategy of new product development, improving margins and driving cost efficiencies, which is already reaping benefits.”

An investment teaser, prepared by KPMG and seen by Drapers, has been sent out to the marketplace in the past fortnight, to coax bids. The document outlines an investment overview and potential opportunities for the new buyer. 

It states: “The current investors believe the business can benefit from being part of a larger platform and would welcome the opportunity to retain a minority stake, which allows them to realise value from their investment to date.”

A source close to the situation told Drapers that one company has already expressed interest in the business.

The document also outlines several strategic initiatives to return the business to profitability. These include the potential closure of its Covent Garden store, where the lease expires in March 2020 and the planned closure of its US stores. Jack Wills has three standalone US stores, according to its website.

It suggests that significant savings can also be made by reducing head office salaries. Meanwhile, Jack Wills said it will also generate considerable savings through the integration of third-party warehousing into existing facilities.

It comes after it was revealed last week that the retailer is burning through a £28m cash injection from owner BlueGem and may need more cash or a restructuring before the end of the summer.

In January the retailer’s lenders, led by high street bank HSBC, appointed accountancy firm EY to assist in negotiations on borrowing covenants and assess the company’s financial position.

In a turbulent year for the young fashion retailer, founder Peter Williams was ousted from the business in August and former Debenhams executive director Suzanne Harlow took over as CEO in September.

Jack Wills had a pre-tax loss of £29.3m on sales of £139.5m in the year to 31 January 2018. It currently has around 100 standalone stores across the UK, Ireland, US, Hong Kong and Singapore.

BlueGem and EY have been contacted for comment. KPMG declined to comment.

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