Maplin halts sale plan
20 June 2011 09:30
The owner of Maplin Electronics has decided to hold back on plans to sell the retailer as a result of the downturn on the British high street, it was reported today.
Montagu Private Equity had been in talks with a trio of private equity rivals about selling the business for up to £400 million, the Sunday Telegraph said.
The trio of parties are believed to have comprised Blackstone, CVC Capital Partners and Advent International.
But after months of talks over valuation, led by advisers KPMG, discussions have now ended after Montagu felt that the levels were not high enough.
Montagu is understood to have changed its plans to hold on to the business for at least another year in the hope of an eventual upturn in the retail sector.
Two of the UK's biggest electrical retailers - Comet owner Kesa and Currys parent Dixons Retail - are expected to spark further fears over the health of the retail sector when they report annual results this week.
Maplin saw like-for-like sales fall by 3% in the past month, according to the newspaper, with footfall in its 180-plus stores down 8% on the same period last year.
The Rotherham-based business also takes a significant amount of sales from its online presence but even that is believed to have been hit by the squeeze on consumer spending.
Montagu bought Maplin, which employs almost 2,200 staff, in 2004 for £244 million from Graphite Capital as part of a secondary buy-out with management.
The company's most recent accounts, filed at Companies House, show that in the year to January 1st, the business made a pre-tax loss of £32.7 million, against a loss of £26.1 million the previous year.
The results discuss the "very difficult retail environment" and show that while its store network delivered a 6% increase in sales, online sales fell by 3.8% while its traditional catalogue business saw a 23.6% reduction.
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