Feb 12, 2019
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Liberty for sale? BlueGem seeks exit - report

Feb 12, 2019

A major investor in landmark London department store Liberty is exploring a sale of its stake in the business, according to a report, with private equity company BlueGem Capital Partners having “asked UBS to sound out prospective bidders.”

Liberty London

That's according to Sky News, which has a strong track record of being right about such stories. It didn't credit a source for the story but did say that BlueGem is looking for around £300 million. But one source told the news organisation that the price tag is an unambitious one and the business could fetch as much as £350 million.

The Liberty business comprises its tourist destination department store just off Regent Street, as well as sister companies that include the famous fabrics division. 

If BlueGem achieved even the lower figure being bandied about, it would represent a big increase on what it paid for the retailer back in 2010, snapping it up for little more than £40 million.

Today’s much higher price reflects the work that has gone into turning Liberty around and its relative strength in a very weak retail market. Fully focused on the luxury sector and smaller than it used to be after vacating the space it once had that fronted onto Regent Street, the remaining ‘Tudor’  building on Great Marlborough Street is a magnet for both UK and international tourists. It’s also a big attraction for luxury shoppers seeking something different from the department store norm.

The company hasn't issued any trading information of late, but the last set of accounts filed for ultimate holding company Liberty Zeta showed earnings on an Ebitda basis of £21 million in the 53 weeks to February 3 last year. 

That came on the back of a strategy to grow its retail and fabrics businesses, while also developing the Liberty London luxury goods brand for global wholesale.

Liberty London

BlueGem, whose holdings also include Jack Wills and Mamas & Papas, doesn't own all of Liberty, having reduced its stake in 2014 by selling an interest to what it said were “prominent and well-established international families from Europe and the Middle East.”

Few details of that deal were made available but BlueGem did say at the time that “these investors are long-term oriented and provide the company with significant stability of capital and a relevant network in the industry.”

It’s not currently known whether the other investors would want to sell their stakes in the firm. Sky News quoted “retail industry sources” saying BlueGem now owns around 40% of Liberty's shares, but the firm hasn’t confirmed or denied that. It's unclear whether the £300 million being sought is for a stake of that size or the whole firm.

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