PwC helping former Maplin owner to save bird-care group Gardman
Rutland Partners, the former owner of collapsed electronics retailer Maplin, is understood to be engaged in a race to sell another of its companies before it slumps into administration. PwC is currently working with the firm to help find a buyer for bird-care group Gardman, but will likely step in as administrator should it fail to do so by the end of October.
Liquidations in the UK high-street have continued to pile up in 2018, with no end in sight at present. Uncertainty relating to an inconclusive Brexit process, and stagnation of wages in real terms, coupled with rising consumer debt, have dealt a triple body-blow to the sector, in a re-run of the 2007 credit crunch, leading to poor sales figures for numerous outlets.
One of the earliest high-profile victims of this downward incline was British electronics retail brand Maplin, which lapsed into administration on the same day as Toys R Us UK. Maplin was previously one of the UK's largest electronics retailers, boasting an annual turnover of £235.8 million, and operating more than 217 stores and over 2,300 staff across the UK and Ireland, with head offices in London and Rotherham.
However, the store then became part of a global trend of private equity investments, which have since backfired in spectacular fashion. A number of high street presences, including Toys R Us and Claire’s, recently collapsed after they were saddled with unsustainable debt by private equity investments. In Maplin’s case, owner Rutland Partners bought the business for £85 million in 2014. However, sales did not grow as expected, and online rivals including Amazon continued to apply pressure to traditional bricks-and-mortar stores, undercutting them on price, eventually resulting in its demise.
Now, reports in the UK media have confirmed that another of Rutland’s properties is similarly on the ropes, as the firm desperately seeks a buyer to save the brand. Founded in 1992, Gardman Group is one of the UK's biggest providers of garden tools and bird-care products. It is understood to have less than a week before time runs out, with sources having reported that Rutland has already filed a notice of intention to appoint administrators in order to buy itself breathing space, amid negotiations for an emergency sale with prospective buyers.
According to reports in the press, Rutland had already received a number of "credible" bids and that the turnaround investor was confident of securing a deal that would avert Gardman's collapse, although it remains unclear whether any such sale would be on a solvent basis or through a pre-pack administration, though an insolvency would be understood to be a major blow for Rutland. The news continues a panicked 2018, which has also seen Rutland Partners offload Pizza Hut UK to a managerial buyout, the private equity firm has been keen to consolidate its holdings elsewhere in a turbulent market.
Rutland bought Gardman in 2015 from a syndicate of banks, remarking at the time that the deal gave the business the “stability and the resources to develop its operations to better address market needs." The accelerated sale process is now being run by PwC, which would be expected to act as Gardman's administrator if a collapse becomes unavoidable, having also run Maplin’s administration procedure, as well as participating in both the purchase and sale of Pizza Hut UK.
