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British Bookshops sold in management buy out
17.03.10 | Catherine Neilan
British Bookshops has been sold by its private equity parent Endless in a management buy out, nearly nine months after the group first acquired it.
Endless said it had "provided a working capital facility to the business in order that the management team can continue the very good work done to date". The firm forecast a return to profitability in 2010 "for the first time in several years".
Endless, which also owns discount specialist The Works, bought British Bookshops from Eason in May 2009 for an undisclosed sum. The Irish book chain had part-owned it since 2004, and took full control of the company in 2005, in a deal then estimated to be worth £30m.
In a statement on Endless' website, John Simpson, managing director of BBS, said: "The business has made fantastic improvements under the new management team in the first six months since Endless’ investment.
"I was impressed by how much time Endless were prepared to devote to the business to ensure that the turnaround got off to a very good start. They have been very supportive of the management team."
Endless said it had implemented a "radical operational restructuring" plan to reduce costs and improve the range of products on sale. It had also hired an "entirely new management team from our network". Endless said the business now employed 400 people; at the time of the original buy-out it employed 600.
Prior to its investment the 40-store retailer had become "loss making and a drain on its parent," Endless said. "Despite [Eason] marketing the business for sale to trade buyers no interest was forthcoming due to the businesses loss-making position. Endless was the only party who could offer a solution for the vendor and we completed an accelerated investment in order to provide the vendor with the certainty it desired."
"This acquisition rescued a failing business and provided a solution to the vendor, where closure, funding of significant future losses or potentially an insolvency were the only other realistic outcomes," the company added.