In April 1997, Cinven led the £78m buyout of Peacocks from its family owners. Headquartered in Cardiff, with 230 branches, Peacocks was a traditional “value for money” retailer that had been growing steadily. The company was a focused business, offering basic clothing with an emphasis on customers over 35 years. Its niche formula had been successful, particularly in Wales and the South West of England.
Cinven saw the opportunity to continue to develop the formula and to roll it out nationwide, backing a high quality chief executive who had joined the business a year before the buyout. This sector of the clothing market was forecast to grow, was seen as being resistant to recession and less subject to the volatility prevalent in the fashion market at that time. Cinven also identified potential improvements to the supply chain including the investment required for a new distribution centre.
The strategy was successfully implemented. Over the three years of Cinven’s ownership, a new Finance Director and Chairman were introduced, profits trebled, a non-core business was sold, over 80 new stores were opened and significant investment was made in IT and the new distribution centre to improve the effectiveness and efficiency of the supply chain.
The business was successfully floated on the London Stock Exchange in December 1999.
Multiple returned on investment: 3.2x.