Cinven led the management buyout of Carpetland from the receivers of Lowndes Queensway in August 1991. The business comprised 85 of the best performing carpet stores in the group that went into receivership earlier in the year.
Under its management team the company installed improved stock control systems and managed to re-establish credit terms with its suppliers to assist it to trade out of its difficulties. The company soon became profitable and in November 1993, with the help of further funding from Cinven’s investors, it was able to merge with Allied Carpets, a larger operation than Carpetland itself, and part of Asda. Under the new name of Allied Carpets, the resulting group was the largest carpet retailer in the UK. The consolidation of the two businesses enabled reduction in advertising costs, improved buying terms, better cost controls and by merging duplicate teams of staff, reduced overheads.
The new company outperformed expectations and in July 1996 was floated on the London Stock Exchange. In February of the following year Cinven’s investors exited the company.
Multiple returned on investment: 6.4x