Consumer Sector Comment – January 2013


Continuing interest by private equity players in fast-growing internet businesses was highlighted by Palamon and Sirius’ investment last month in a majority stake in online beauty retailer The transaction was agreed at an enterprise value of £26 million. sells premium products in haircare, skincare, cosmetics and fragrances from most of the major brands and aims to be the “Asos of the online beauty market”. The company was established as Island Cosmetics by Aaron Chatterley and friend and business associate Richard Schiessl in 2005 and has grown rapidly to annual revenue of more than £30m.

Christmas in 2012 was the biggest yet for online retailers. Trading results from the festive period continue to highlight not only the necessity of having a strong web proposition but also the advantage that can be gained from combining store presence with internet operations, and in particular click and collect. Notable beneficiaries of this trend have included Next, House of Fraser, Debenhams and John Lewis. John Lewis saw internet sales increase 44.3% on the back of click and collect, with sales at breaking “through the £800m milestone” during December.

Click and collect is becoming increasingly important in the UK and can be an attractive option for customers as it avoids the need to wait in for deliveries, reduces delivery charges and makes returns easier. For retailers, there can be a cost saving. Even Ebay has been experimenting with physical retail via pop ups and plans to increase its offline shopping options through services such as click and collect. Predictions are for continued growth in omni-channel retailing in 2013.


Pets at Home Ltd has acquired family owned Ride-Away, a leading equestrian multi-channel retailer with a turnover of £6.7m. Nick Wood, Pets at Home chief executive, said: “The acquisition of Ride-Away is a really exciting opportunity for Pets at Home where our equestrian offer is very limited at present.

Palamon Capital Partners, a European growth investor, and Sirus Equity have acquired a majority stake interest in the beauty online retailer thebigwebsite Ltd which trades under for £26m. The investment is driven by the strong growth in the on-line beauty retail sector driven by a shift in consumer habits.

Larderbox, a provider of monthly food and groceries delivery services, has been acquired by competitor FoodeeBox Ltd. Both online retailers act as a distribution channel for independent and artisan manufacturers.

Barrhead Travel Services Ltd has acquired the online cruise travel agent Holiday Specialists Ltd for an estimated £3m. The deal will create the largest independent retailer of cruises in the UK and Scotland’s biggest travel group. Turnover is expected to increase by 22% to more than £200m by the end of the next financial year.

Cardzone Ltd (t/a Paper Kisses) announced the acquisition of family owned Special Occasions Ltd, a high street retailer of greeting cards, gifts and wrapping essentials. Cardzone will add a further 15 outlets across the Cotswold. Turnover is expected to increase to £9m.

BMG Rights Management GmbH has acquired Mute Records Ltd owned by EMI which includes releases by artists such as Depeche Mode, Erasure, Nick Cave and Moby. The deal is estimated to be worth just over £7m and is pending the approval of the EU anti-trust commission.

Capital Shopping Centres Group Plc has acquired the remaining 50% stake of Xscape Braehead, a family entertainment destination which offers snow slopes, lifestyle retailers, bars and restaurant, and a cinema. The total consideration was £4m.

William Hill Plc, one of the largest bookmakers in the UK, and GVC Holding, an online sports betting and gaming operator, have jointly acquired Sportingbet Plc, a British e-gaming and betting company, for a total of £519m. William Hill will acquire the Australian operations and other specific assets whereas GVC will acquire the entire issued capital of Sportingbet.

Cineworld Group Plc, a cinema operator, has acquired Cine Screen Ltd, an art-house cinema chain, for £47.3m. Cineworld is entering in the high value and high growth segment of the UK cinema market, and simultaneously broadening their existing footprint, from both geographically and strategically.

NBGI Private Equity has backed the £23.5m MBI of the own-brand cake division of McCambridge Group Holding a large producer of cakes for the UK food industry. McCambridge stated that the sale would enable them to focus more on growing their malt loaf brand, Soreen and their bakery division in Ireland.