Foschini eyes Hobbs takeover but won't pay £80m asking price
The company, which already owns the Whistles and Phase Eight chains as well as the Damsel in a Dress brand, is reported to have made an offer to 3i, the private equity giant that currently owns the Hobbs womenswear chain.
That news came just a few weeks after it was reported that TFG might also be interested acquiring up-for-sale trio Oasis, Coast and Warehouse, although no more news has emerged about that so far .
The Sunday Times reported that other smaller private equity firms are also believed to be interested in Hobbs, but with none of the potential bidders currently lining up to pay the £80 million 3i wants for the business. That would mean 3i would get back less than it has invested in its ownership of the business, something that also happened when it sold Agent Provocateur this year.
That lack of buffers willing to pay the asking price is perhaps a surprise. Hobbs may have seen its turnover dropping by almost 6% to £109.9m in the latest year for which full results are available (the 12 months to January 2016), but its profit on an Ebitda basis rose and it swung back to profit during the period.
The firm’s earlier strategic review had come as its pre-tax losses widened in 2015. But the business is reported to be in much better health today, although the current fragile state of the UK fashion retail market could be depressing the potential sale price.
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