Distressed purchases, refinancing and equity injections will characterise private equity activity in the retail sector next year according to Silverfleet Capital, the fund behind discount chain TJ Hughes.
Gareth Whiley, retail sector expert, from private equity house Silverfleet Capital, warned that there would be little if any debt available for other types of private equity retail deals next year.
Whiley also warned that luxury retailers backed by private equity would not be immune to the slowdown and would start to feel the pinch next year.
Whiley said: "On the merger and acquisition front there will be lots activity but little of it will be conventional. Distressed purchases will be common such as Sir Philip Green's involvement with Baugur and any retailers backed by the Icelandic banks generally."
Whiley also forecast that some suppliers would go to the wall next year taking unprepared retailers with them.
"It's looking very bleak for retailers generally but there are exceptions within this generalisation," said Whiley.
"The watchword for several years now has been value for money. In 2009 it will be value for less money. Consumers' will continue to trade down. Non-branded value retailers such as Primark and branded discounters such as TJ Hughes have seen a marked shift."