Apax Partners

"We have transformed the business over the last 3 1/2 years and I am not sure we could have done that as a public company." Phil Wrigley, CEO, New Look

New Look is the leading women’s value fashion retailer in the UK. It has more than 500 stores in the UK and 200 stores trading under the Mim format in France. New Look sells clothes and accessories at prices which are typically 30% below traditional competitors, but with significantly more fashion content than the value competitors.

The founder of New Look, Tom Singh, approached Apax Partners in May 2003 with the concept of a public to private transaction, led by the management team and supported by Apax Partners and himself.

A review of the opportunity confirmed the attractiveness of the deal. When Permira and Apax Funds invested in New Look it had been through a difficult period. The business had been floated on the stock exchange in 1998 but the management team had become increasingly frustrated by what it felt was the stock market’s primary focus with share prices and short term performance. Permira and Apax Funds felt that the company’s diffuse and distant shareholders could not see the big picture and that with some attention and investment New Look could be turned into a genuine champion of the high street. In April 2004, Apax Funds (AEIV and AEV) and Permira Funds each invested £100m in the buyout vehicle led by Tom Singh which was designed for the purpose of purchasing New Look. Apax and Permira Funds each assumed a 31% stake in the company, with Tom Singh retaining 23% and management the remainder of the equity.

Much has been achieved thus far by the business under joint private equity ownership. This has included the reorganisation of the management team with a new CEO and new buying and international directors appointed.

The business’s product range has widened to include men’s and children’s wear. Average store sizes have increased with an investment in a new distribution centre to cater for this. In turn, its customer base increased significantly. The support from private equity ownership was crucial in achieving this increase in scale.

Beyond its operations in France, the business has sought further international expansion into the markets in Belgium and Ireland and as far wide as Kuwait and Dubai. A staff incentivisation scheme has also been introduced to drive growth across the business. The transformation has been significant, achieved at a pace beyond what would be possible under public ownership.

“We have transformed the business over the last 3 1/2 years and I am not sure we could have done that as a public company. An extraordinary number of changes have been made over a short period of time which has required a significant amount of financial investment and also a significant amount of communication to ensure that investors were comfortable with the scope of changes being made... this was a significant transformation and included investment in people and systems to create the infrastructure that gives the business the capability to grow to become a global retailer which is the ambition of the management team.” Phil Wrigley, CEO

Employment has increased significantly with over 3,000 jobs created. EBITDA has also grown by over 50%. Apax Funds saw an opportunity to create value in a public to private transfer of ownership of New Look. During that period of ownership the management team has sought and achieved a significant transformation of the business.

New Look has an active CSR policy and has appointed a Director of Corporate Social Responsibility accountable for all aspects of the group’s strategy for ethical trading, social responsibility, the environment and sustainability. In particular, a key focus at New Look is ensuring appropriate standards of factory conditions for the workers of suppliers. New Look has been a member of the Ethical Trading Initiative since 2003 and has adopted the ETI Base Code for its Ethical Aims. The Company has materially increased its investment and activity over a number of years. New Look also has clear policies on environmentally sound, sustainable raw material sourcing, recycling, employee communication/rights and energy conservation.