In May 1996 Cinven acquired Hoogenbosch, the Dutch footwear retailer owned by Sears plc. The company was the leader in the Dutch footwear market, trading through a number of fascias including Manfield, Dolcis, Invito and Olympus, all but one of which was the leader in its segment. It also had a small number of outlets in Belgium and Germany. As part of Sears’ review of its portfolio it was agreed that management would buy out the Hoogenbosch business which had been underperforming for a short period of time, although historically it had always traded successfully.
A strong and experienced management team was headed by a new chairman, introduced to the deal by Cinven. The business plan included relocating some of the stores to larger premises and opening more branches in the Netherlands, Belgium and northern Germany. A heavily loss making discount chain, Shoenexpress, was to be sold to a major competitor. Costs were to be cut at the head-office, working capital levels would be reduced, while improved buying practices and lower markdowns would lead to improved margins.
The strategy proved to be a success. By the end of Year One the business had almost achieved the profit improvements projected for the third year. A partial exit was achieved at this stage and final sale of the business to Macintosh BV took place in December 1999.
Multiple returned on investment: 3.3x