Liberty’s parent company BlueGem has sold its 40% stake in the business to private equity consortium Glendower Capital in a deal valuing the business at £300MM ($375 million).

WHO: Liberty, the retail landmark on Great Marlborough Street, which was founded by Arthur Lasenby Liberty in 1875 with a £2,000 loan from his future father-in-law, has grown to become an international brand.

BlueGem Capital Partners was founded in 2007 and has over €500 million of assets under management. BlueGem exclusively invests in European consumer-facing businesses.

Glendower Capital was founded in 2017 based upon the belief that patient capital and a flexible investment mandate are competitive advantages in the pursuit of superior, long-term risk-adjusted returns. Glendower's primary investment objective is to identify investment opportunities in secondary private markets with asymmetric risk/reward profiles, offering enhanced downside protection and meaningful upside optionality.

IN THEIR OWN WORDS: “I am grateful and proud of the team and of their achievements. I am confident we have built a truly differentiated business and assembled a first-class management team that will allow Liberty to reclaim its status as one of the most iconic brands in the world, and the last truly heritage British brand,” said Marco Capello, Chairman of Liberty London.

Emilio Di Spiezio Sardo and Marco Anatriello, Partners and co-founders of BlueGem, said, “Since the initial acquisition in 2010, BlueGem generated returns across their two funds, BlueGem I and II, of c. 12 times the initial investment. The secondary recapitalization accomplished two goals: it generated liquidity in line with the expected investment timeframe for BlueGem II as well as certain co-investing LPs, and it provided Liberty and the management team with a shareholders’ base to support its next stage of growth. All the BlueGem Partners co-invested on a personal basis with Glendower. Marco Capello will remain Chairman of Liberty going forward, and this will help BlueGem to remain on top of the emerging trends and brands that are a staple of Liberty’s history."

DETAILS: 

• BlueGem has sold its 40% stake in Liberty to private equity consortium Glendower Capital in a deal valuing the business at £300MM.
• The remaining shares in Liberty owned by family offices in Europe, the US, and the Middle East are not part of the deal.
• Three BlueGem executives, including Mr Capello, Emilio di Spiezio, and Marco Anatriello, will retain their personal investments in the business.
• BlueGem said that by 2018, Liberty’s revenues and EBITDA had grown to £166 million and £25 million respectively.
• Store sales increased from £36MM to £94MM with substantial growth derived from brands that are either new or exclusive to Liberty last year.
• Online revenues increased in 2018 from £1MM to £14MM with significant further potential.
• The fabrics business has been growing at an 11% CAGR since 2010 from £22MM to £53MM of revenues.
• Owned brand Liberty London, launched only three years ago to focus on accessories, small leather goods, and sleepwear, is already generating £8MM in sales.
• Most recent results for the year to February 2018 saw sales rise 8% and pre-tax profit more than triple to nearly £7MM, with over 60% of profits coming from own-label merchandise.
• In 2014 BlueGem sold an undisclosed share to “some prominent and well established international families from Europe and the Middle East."
• BlueGem acquired a controlling stake of the business for £32MM in 2010.
• In 2010, the department store recorded sales of £63 million and an EBITDA close to zero.
• In order to lead the Company through its next phase of growth, in early 2018 BlueGem brought on board as CEO Adil Khan, former CEO of Luxottica and Wella and ex Vice President Beauty for P&G, while Marco Capello of BlueGem stepped down from the Executive Chairman position and transitioned to the role of non-executive Chairman.
• UBS advised BlueGem on the transaction.