Truworths puts Office up for sale - report
Footwear chain Office is up for sale with reports that its South African owner Truworths is seeking a quick exit from the UK-based brand that has had more than its fair share of problems in recent years.
Truworths acquired the business 2015 in a deal worth around £250 million, a value it’s unlikely to get close to these days. It’s believed that professional services firm Alvarez & Marsal (A&M) will be running the sale process, although it’s unclear how appealing the chain might be.
The company operates 130 stores in the UK and Europe (with a focus on Ireland and Germany). But in the current Covid-19 crisis, up-for-sale chains in anything but robust good health could find buyers thin on the ground. And sale processes for less healthy companies lately have seen low demand with buyers sometimes preferring to pick up a business in administration as that means it can be easier to shed stores and staff. Yet that doesn’t seem to be an option for Office as it’s said to be solvent.
Sky News reported the potential sale and A&M’s involvement. That firm is also in charge of the sale process for Cath Kidston, which has filed a notice of intention to appoint administrators.
As mentioned, Office has had its problems of late. Last November, CEO Lorenzo Moretti stepped down after just a year in the role with COO Kerry van der Merwe stepping up as interim MD.
And while it concluded a refinancing packaging a few months earlier, it had reportedly considered a CVA. Even without such a process, it still planned to shut some stores when their leases expired. The company had also talked last year about very tough trading conditions.
Analysts are unsure about how strong a future the chain might now have. GlobalData’s Sofie Willmott said: “Despite its broad range of desirable casual trainer brands, Office has been outshone by both multichannel and online rivals in the form of JD Sports and Asos, with range overlap the primary reason for the specialist’s difficulties.
She added: “Although its inventory is less seasonal than its clothing counterparts’ and it has a better chance of selling-through its stock once stores reopen, it is not a branded destination and is not top-of-mind for its target customer base. Clothing & footwear is forecast to be the hardest hit sector by the pandemic and footwear [is] set to fare worse than clothing as consumers forgo purchasing new shoes.”
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