High Street Trend Has a Retro Look

Article excerpt

Byline: NEIL CRAVEN

PRIVATE equity's obsession with the High Street came to an abrupt haltthis summer and now acquisitions by trade buyers may be set to return.

The retail sector found itself at the centre of the buyout frenzy in Februaryand March. Bids for Alliance Boots and Sainsbury's prompted daily speculationthat others might also be snapped up.

But during the summer, enthusiasm for deals was dampened as first the creditcrunch, then fears of a consumer slowdown emerged.

In April, a private equity approach for Sainsbury's, led by CVC, collapsed andclothing retailer New Look was withdrawn from sale in June - its private equityowners unhappy with the offers.

With the heady prices formerly offered by private equity no longer available,experts predict a period of sobriety with corporate acquisitions - trade buyersconsolidating smaller rivals.

'There is a pattern emerging of weaker retailers vulnerable to opportunisticmoves from the larger, more successful competitors,' says Robert Clark atanalyst Retail Knowledge Bank.

Tesco's offer for Scottish garden centre chain Dobbies, Game Group'sacquisition of rival GameStation, and Sports Direct's seemingly insatiableappetite for buying sports brands such as Lonsdale, suggest this has alreadybegun. …