New Look: Going Private with Private Equity Support

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