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Bathstore sold in MBO

An American billionaire is the surprise backer of a management buyout of Bathstore, the British high street bathroom chain.

Warren Stephens, a private equity and banking tycoon from Arkansas, has teamed up with Bathstore’s senior bosses, led by Gary Favell, the former chief executive of failed furniture retailer MFI.

Stephens is chairman of a vast investment house that takes his family name and was founded by his late father Witt Stephens. It has interests in private equity, asset management, and insurance. However, the deal was made through a family trust.

The consortium has bought retailer from Endless, a turnaround investor, which has owned the company for the last two years.

It is unclear how much Favell and his team paid for the retailer, which has 170 stores, but it is understood that Endless made a fivefold return, having invested roughly £11m in Bathstore. Endless bought the chain for £15m but that was paid in instalments out of its profits.

It was carved out of Wolseley, the FTSE-100 plumbing and building materials giant, where it had been struggling since the housing market downturn that followed the financial crisis.

Endless installed Favell and focused on improving online growth, customer service and new products. Under the firm’s ownership, sales have increased 30pc and earnings have jumped by £5m.

Rothschild advised Endless on the sale process.

Source : Ben Marlow and Ashley Armstrong - The Telegraph

01 July 2014

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