Advent will sell clothing retailer Takko to Apax
FRANKFURT: Apax Partners LLP, a London-based private-equity firm, agreed to acquire Takko Holding GmbH from Advent International Corp. to gain the German operator of about 1,500 discount clothing stores.
Apax agreed to pay about 1.3 billion euros ($1.7 billion) for Takko, three people with knowledge of the talks said yesterday. The companies didn't disclose the price today. The transaction is expected to be completed in the first quarter of 2011 and must be approved by antitrust authorities, Boston-based Advent said in a statement.
Takko, which is based in Telgte, Germany, plans to open about 150 stores a year as it expands into eastern Europe. The retailer has annual sales of 938 million euros and 12,500 employees, Advent said. Advent, manager of a 6.6 billion-euro leveraged buyout fund, is selling Takko after buying it for 770 million euros in 2007.
"We regard the Takko concept as having enormous potential for expansion, but also further opportunities for sales productivity growth," Apax partner Christian J. Naether said today in a separate statement. "We fully support the successful manage- ment team, led by CEO Stephan Swinka, in pursuing its chosen growth course."
Apax Partners, which in the past year has invested or committed 2.3 billion euros in seven investments across four continents, has previously invested in retailers including Tommy Hilfiger and New Look, it said.
Leveraged buyout firms pool money from investors to take over companies, financing their purchases mostly with debt, with the intention of selling them later for a profit. The firms seek to expand or improve performance at companies they acquire before selling them within about five years.
"We are delighted about the partnership with Apax and the resulting potential for future growth, especially in ecommerce and international expansion," Takko Chief Executive Officer Swinka said in Apax's statement. The company will continue to expand internationally and open more stores under its new brand "1982," Apax said.
Apax had been competing with EQT Partners AB as well as joint bidders PAI Partners and TPG Capital, people familiar with the matter said earlier this month. Advent had also explored an initial public offer- ing of Takko, the people said.
Advent was advised by Goldman Sachs Group Inc. and Deutsche Bank AG as well as law firm Hengeler Mueller. Apax was advised by Nomura Holdings Inc., Lazard Ltd., and Ferber & Co. as well as Bain Consulting, Pricewaterhouse Coopers LLP and Linklaters LLP, it said.
Bulgari gold succumbs to ceramics with jewelry hostage: In June, Bill Doddridge flew his single-engine Cessna 400 to Twentynine Palms Airport near California's Mojave Desert and headed for an abandoned mine, a .45-caliber pistol on his belt. He was looking for gold.
The firearm was to ward off rattlesnakes. The precious metal would be a sideline to his jewelry business. He sifted through dirt, climbed into shafts, and later bought the property, shuttered since World War II.
"If we're not making money selling gold, we might as well get into mining it," says Doddridge, 55, chief executive officer of Tustin, Californiabased Goldenwest Diamond Corp., a privately held company that owns 17 Jewelry Exchange stores and an online site. "It's a whacked out world."
The rising value of bul- lion-reaching a record $1,431.25 an ounce on Dec. 7 - - has upended the economics of jewelry for buyers and sellers alike, with a mix of outcomes around the world. U.S. purchases of gold jewelry have fallen 36 percent by volume in three years. Women in India, where demand is booming, are buying hollow bangles made to look like solid gold. European jewelers are mixing the metal with steel and ceramics. Turkish exporters are closing offices as orders fall.
"The jewelry business is being held hostage by something completely out of its control," says Michael Langhammer, CEO of Quality Gold, a Fairfield, Ohio, privately held wholesaler that Langhammer says is redesigning pieces to use more silver.
Gold's price has climbed about 200 percent since the debut in November 2004 of a bullion-backed exchange traded fund created by a World Gold Council trust, allowing the metal to be acquired on the New York Stock Exchange as easily as shares.
Global purchases of gold jewelry were $20.9 billion by value in the third quarter, 38 percent above the year-ago period, according to the London-based World Gold Council, which represents min- ing companies, and GFMS Ltd., a research firm in London. Demand by volume has diminished in some countries and increased in others, and the gold jewelry industry has to adjust to customers' buying power depending on where they are.
Not knowing how high the price will go makes deciding on styles and ingredients a challenge, Doddridge says. He acquired the mine, for a sum he won't disclose, as a defense. "Gold is the only thing screwing up this business," says Doddridge, who expects his total 2010 sales to be up about 7 percent and sales of gold items to be down about 25 percent. Designers are scaling back on gold parts or relying on gold that isn't as pure.
At Richline Group, a manufacturer in Mount Vernon, New York, owned by Warren Buffett's Berkshire Hathaway Inc., 40 percent of sales are in gold, compared with more than 70 percent in 2006, says Chief Marketing Officer Mark Hanna. Signet Jewelers Ltd., with more than 1,300 shops in the U.S. and about 550 in the U.K., is offering more silver, tungsten and titanium, says Ed Hrabak, senior vice president of merchandising at the world's largest jewelry retailer. -Bloomberg