Mountain Warehouse has a new partner on its trek.
Inflexion Private Equity Partners bought about 20 percent of the London-based outdoor apparel and equipment retailer on Sunday, spending roughly 45 million pounds for the stake. The deal gave Mountain Warehouse an enterprise value of 310 million pounds.
The company, which started with a shop in Swindon in 1997 and has 300 stores in nine countries and 3,000 employees, will continue to be led by Mark Neale, founder and chief executive officer.
Neale plans to stick with the approach that’s worked for him so far.
“It’s my firm belief that if you have the right products at the right price, in the right locations and provide great service, people will keep shopping with you,” the ceo said. “It’s great that Inflexion share that belief and wants to help support the next phase of our growth.”
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Mountain Hardware’s sales climbed 22 percent for the year ended Feb. 25 to 225.3 million pounds, which marked 21 straight years of growth. The company still operates mostly in its home market, with 220 stores in the U.K., but also has outposts in Poland, Canada, Holland, Germany, Ireland, Austria, New Zealand and the U.S.
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The company plans to double in size over the next five years.
“Having followed the business for a decade, we understand how management envisage it growing, and look forward to assisting them with their growth in the U.K. and international markets, as well as with their digital offering,” said Simon Turner, managing partner at Inflexion.
The deal might be a sign of the times.
Despite a spate of trouble in the worlds of retail and apparel and uncertainty on the geopolitical scene, some observers are becoming more bullish on apparel dealmaking.
A recent Deloitte study of mergers and acquisitions trends found that private equity players and investors believe the fashion and luxury space will grow between 5 and 10 percent annually over the next three years.
The areas of digital luxury and cosmetics and fragrances are projected to outperform, while apparel and accessories and watches and jewelry keep up with the average growth level.
Deloitte found that 89 percent of the private equity executives and investors surveyed planned to acquire at least one fashion or luxury company this year. Seventy-three percent said apparel and accessories was still the most attractive sector for a deal, while 60 percent singled out cosmetics and fragrances and just 19 percent pointed to watches and jewelry.
Just 16 percent of the respondents pointed to digital luxury as a good sector for M&A, showing that a promising sector with lots of growth isn’t necessarily the easiest place to get a deal done.
Deloitte logged 217 fashion and luxury deals last year, including 77 in the apparel and accessories space.
The biggest deal of the year was the Arnault family’s $13.7 billion acquisition of Christian Dior, which brought the business under the umbrella of LVMH Moët Hennessy Louis Vuitton. Coach Inc. also bought Kate Spade & Co. for $2.4 billion, while Michael Kors Holdings Ltd. acquired Jimmy Choo for $1.2 billion.