Key Takeaways
- Sector: Consumer.
- Geography: United Kingdom.
Analysis
The Carlyle Group has taken a controlling stake in Very Group, marking the end of more than two decades of Barclay family ownership and giving the online retailer a fresh capital platform for expansion.
The deal, announced after a board meeting to ratify governance changes, follows a sizeable financing package from Carlyle that included an injection described by sources as several hundred million pounds. Company insiders say the move strengthens the retailer's balance sheet and buys time for an operational push across marketing, supply chain and credit services.
Trading under the Very and Littlewoods banners (formerly Shop Direct), the group posts annual revenues north of £2bn, serves roughly 4.4 million customers and combines general merchandise with an in-house consumer finance business. In its most recent year, group chief executive Robbie Feather reported a 16% rise in adjusted EBITDA to £307m, evidence, executives say, of resilient underlying margins despite pressure on discretionary spending.
Earlier this year the company secured an emergency facility including a £600m borrowing from a Mayfair-backed fund as it navigated short-term liquidity strain. That financing, and the new capital from Carlyle, have been characterised by directors as essential to safeguard operations while management executes a growth plan focused on digital personalisation, faster fulfilment and deeper use of its consumer credit products.
The change of ownership closes a chapter that began when the business (then Littlewoods) last moved hands in 2002 in a transaction valued at £750m. Private-market estimates cited by industry contacts have placed the retailer's valuation around £2.5bn, although no public price has been disclosed and Carlyle declined to comment.
Chairman Nadhim Zahawi, appointed last year, and CEO Robbie Feather will now work with Carlyle on a multi-year plan. Analysts say Carlyle could hold the asset for a sustained period to de-risk the model before considering exit options, including a future sale or public listing if consumer trends and profitability continue to improve.