LITTLEWOODS

Background

With a backdrop of declining sales and rising property costs, Littlewoods’ owners took the strategic decision to reposition the brand as a purely online retailer with the formation of Littlewoods Shop Direct Group in 2005. The company’s 120 bricks and mortar stores were sold to Associated British Foods plc (‘ABF’), owner of Primark and Selfridges, for a total consideration of £409 million.

ABF’s main aim in acquiring the Littlewoods stores was to convert many of them to its Primark fascia and to lease the balance to New Look. ABF approached Hilco to develop a robust plan to deliver this operationally demanding transition.

Hilco Capital’s role

• Developed unique operating plan to maximise returns on assets and maintain store integrity while managing solvent wind down of Littlewoods and transfer of stores to new retailers
• Underwrote net cash outcome to minimise risk to ABF
• Assigned senior Hilco team to Littlewoods’ head office to manage all aspect of the business across:

• finance
• retail operations
• liaison with trade unions
• supplier negotiations

• Deployed 45 retail consultants to manage operations in the field, including the store handover process

Results

• Successfully operated the 120-store business during the 26 week transition process
• Returns from trading the stores during the process exceeded all cash targets, even after all contract
  termination and redundancy costs paid
• Delivered all stores to new owners precisely on schedule, in ‘broom clean’ condition
• Enabled ABF to quickly establish Primark as a national retailer in the UK with little downside risk