British footwear chain Office has been sold to South African fashion retailer Truworths International for £256m.
Private equity firm Silverfleet Capital, which has owned Office since December 2010, said the sale followed a five-year period of investment, during which the chain achieved “significant growth” in the UK and Germany.
During that time, Office expanded its retail estate in the UK and Ireland from 75 to 115 stores under the Office, Offspring, Poste and Poste Mistress fascia and opened six in Germany. It also increased the number of concessions to 47, in Selfridges, Topshop, Topman and House of Fraser.
The £256m price tag is below the £300m valuation reported when Office was tipped for an IPO last year; however, Silverfleet described it as a “great deal”, which is more than three times what it paid for the retailer in 2010.
Office was founded in 1981 and is headquartered in London. Total sales in the financial year to January 2015 were £270m, of which 20% were online.
It is thought that Truworths, which does not own any other footwear businesses globally, could support Office to expand internationally, including into South Africa.
The management team, led by chief executive Brian McCluskey, will remain in place. It is understood Truworths holds an 89% stake, while the management team has 11%.
McCluskey said: “Together with Silverfleet, we have grown the business into the success it is today.
“We are excited to have found a long-term strategic retail partner in Truworths International. We look to further invest in the business and continue our success.”
Gareth Whiley, partner at Silverfleet Capital, told Drapers the deal would provide stability for the team: “Truworths is a trade buyer with big plans; they’re looking to acquire more businesses in the UK and Europe. I don’t think they will sell Office in the near future.”
The closing of the transaction, which is expected in early December, is subject to approval by the South African Reserve Bank.
Truworths is the latest South African retailer to invest in a UK fashion business, following The Foschini Group’s acquisition of Phase Eight in January and Brait’s acquisition of New Look in May.
“There is a drive from South African retailers to get some income from outside the country,” explained Whiley.
Truworths at a glance
- Established by The Alliance Trading Company in Cape Town in 1917
- Listed on the Johannesburg Stock Exchange
- Run by chief executive Michael Mark
- More than 650 stores in South Africa and 40 in the rest of Africa
- Group retail sales for the year ended June 28 2015 increased by 8.2% to R11.6bn (£532m)
- Own brands include Truworths, Truworths Man, Inwear, LTD and Identity