Barclays Private Equity backs £27 million MBO of Phase Eight

Building on its considerable experience in the retail sector, Barclays Private Equity, who recently sold Hobbs for £111m, has backed the £27m management buy out of Phase Eight, the retailer of stylish contemporary women’s clothes, shoes and accessories. As part of the deal, Barclays Private Equity will take a 72% stake, with management taking the remaining 28%.  

Phase Eight was founded in 1979 and now trades from 90 outlets throughout the UK. Turnover forecast for the year to January 2005 is £30m, generating operating profits of £3.6m. Phase Eight’s strength is in its originality - exclusive designs are combined with beautiful fabrics and unique prints.  

The buy out of Phase Eight, led by Chief Executive Joy Walters who joined the business in January 2002, will be chaired by Stephen Sunnucks, formally Chief Executive of New Look.  

Steven Silvester, Director of Barclays Private Equity, commented: "Phase Eight under Joy Walters, has witnessed exceptional growth and is a highly attractive niche retailer. We believe the company has substantial growth potential, and are delighted that Stephen Sunnucks, who has an excellent track record in retailing, will be joining the board as Chairman."  

Joy Walters, Chief Executive said: "Phase Eight has developed a loyal clientele through its unique combination of exclusive contemporary designs, quality, and competitive pricing relative to its peers. We are delighted to have partnered with Barclays Private Equity, who helped Hobbs grow from 34 locations to 60 in less than two years.  

“With their help, we intend to build on our recent successes and increase the number of trading locations, particularly in department store concessions where Phase Eight’s like for like sales growth has substantially out-performed the market".  

Other members of the MBO team include George Reynolds, Finance Director, Design Director Judith Bremner, Operations Director Lee Harlow, and Beverley Banton, Human Resources Director.  

Steven Silvester, Anton Wellenreiter and Fergus Hall led the investment for Barclays Private Equity. Debt funding was arranged by Barclays Leveraged Finance and provided by Barclays specialist Retail and Wholesale Team.  

Stephen Rutherford, specialist Clothing and Footwear Relationship Director within the Retail and Wholesale Team said: “I have admired Phase Eight for some time. The brand has significant potential for further development and we are delighted to have been able to support the MBO. I look forward to developing a strong working relationship with the management team.”  

Barclays Private Equity's advisers on the deal were PricewaterhouseCoopers and Addleshaw Goddard.