Baring Asia exits Cath Kidston to UK turnaround investor

BPEA acquired a substantial position in Cath Kidston from TA Associates and company management in 2014 – at a valuation of around GBP 250m (USD 426m) – with a view to expanding the business in Asia. It assumed control two years later, taking out TA’s remaining stake. Around the same time, Cath Kidston’s Japan operation, the largest outside the UK, was bought back from a local partner.

The company, which started out as a single shop in London in 1993, had grown into a global lifestyle brand known for vintage-inspired floral prints. It sells a range of bags, accessories, clothing, homeware and kidswear. As of year-end 2019, there were 60 directly owned stores in the UK, 40 in Japan, and 90 more run by franchisees in other markets. Of the latter, 73 were in Asia.

Operational challenges were exacerbated by Brexit and then COVID-19. In April 2020, Cath Kidston entered administration – after attempts at a solvent sale failed – leading to the closure of its UK stores. Meanwhile, the Japan operation filed for bankruptcy locally. The company’s global wholesale and franchise operations, as well as its online platform, continued trading.

BPEA bought back the brand, website, and e-commerce platform with a view to rebooting Cath Kidston as a smaller, sustainable business. There are now six outlets in the UK, including a global flagship store in London’s Piccadilly.

Marty Wikstrom, non-executive chair of Cath Kidston, said in a statement that the company had successfully negotiated its various challenges: “The company’s flagship store in Piccadilly is growing rapidly and performing close to pre-pandemic levels, and orders from our international and UK franchisees and wholesale partners grew 40% for the fiscal year ending March 2022.”

Wikstrom added that Hilco will commit additional resources to accelerate growth. The firm provides services to businesses and insolvency practitioners, as well as investing in stressed situations throughout the UK, Europe, Canada, and Australia. It claims significant experience working with stressed and distressed assets across retail, manufacturing, wholesale, and distribution.

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• Topics
• Consumer
• Europe
• North Asia
• Trade sale
• Buyouts
• Baring Private Equity Asia
• Asia