New Look: Going Private with Private Equity Support

Journal of Business Strategy, Vol. 31, No. 3, pp. 38-49

17 Pages Posted: 16 Apr 2008 Last revised: 21 Jun 2010

See all articles by Ann‐Kristin Achleitner

Ann‐Kristin Achleitner

Technische Universität München - Center for Entrepreneurial and Financial Studies

Eva Lutz

Heinrich-Heine-Universität Düsseldorf, Endowed Chair in Entrepreneurship/Entrepreneurial Finance

Kerry Herman

Harvard Business School

Josh Lerner

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER)

Date Written: April 1, 2009

Abstract

Purpose: This papers analyses the case study of UK fashion retailer New Look and focuses on the impact of private equity on corporate governance, employment and leverage after the public-to-private transaction in 2003.

Design/methodology/approach: We follow a single case study approach to offer in-depth insights into the role of different parties involved in the deal and their perceptions. Our case study is based on semi-structured interviews with key management of New Look, partners of the private equity firms and other important members of the New Look board. In addition, we complemented our analysis with secondary sources (e.g. analyst reports, published articles and financial data of New Look) in order to triangulate our findings.

Findings: The case presents an example of a company that pursued a public-to-private transaction with the support of private equity partners. The envisioned transformation process post-transaction turned out to be highly successful with increasing efficiencies and profits as well as an increase of over 3,500 employees over four years. This paper analyses key success drivers and the role of the private equity partners in achieving this success.

Originality/value: Our paper is the first in-depth case study of a European public-to-private transaction with support of private equity which offers rich evidence on the impact of private equity on corporate governance, employment and leverage.

Keywords: Private equity, going private, employment, corporate governance

JEL Classification: G34

Suggested Citation

Achleitner, Ann-Kristin and Lutz, Eva and Herman, Kerry and Lerner, Josh, New Look: Going Private with Private Equity Support (April 1, 2009). Journal of Business Strategy, Vol. 31, No. 3, pp. 38-49. Available at SSRN: https://ssrn.com/abstract=1120230 or http://dx.doi.org/10.2139/ssrn.1120230

Ann-Kristin Achleitner

Technische Universität München - Center for Entrepreneurial and Financial Studies ( email )

Arcisstr. 21
Munich, D-80290
Germany
+49 89 289 25181 (Phone)

Eva Lutz (Contact Author)

Heinrich-Heine-Universität Düsseldorf, Endowed Chair in Entrepreneurship/Entrepreneurial Finance ( email )

Universitätsstr. 1
Duesseldorf, 40225
Germany

Kerry Herman

Harvard Business School ( email )

Cambridge, MA
United States

Josh Lerner

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-495-6065 (Phone)
617-496-7357 (Fax)

HOME PAGE: http://www.people.hbs.edu/jlerner/

Harvard University - Entrepreneurial Management Unit

Cambridge, MA 02163
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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