Cath Kidston To Bloom In £250m New Year Sale

By Mark Kleinman, City Editor

Cath Kidston, the retailer known for its floral-print product ranges, is eyeing a new year sale jackpot that could net its eponymous founder at least £50m.

Sky News can exclusively reveal that TA Associates, the buyout group which bought 60% of Cath Kidston in 2010, is planning to put the company on the market in 2014 and is expected to seek well over £250m for the fast-growing business.

UBS, the investment bank, has been appointed to handle the sale, insiders said on Friday.

A successful sale, which is expected to attract interest from dozens of private equity firms as well as sovereign wealth funds, pension funds and other retailers, would underline Cath Kidston's status as one of the biggest success stories in the British retail sector.

Last week, the London Stock Exchange named it as one of 1000 companies "to inspire Britain" because of its growing international customer base.

On Thursday, the company opened its new flagship shop next to the department store Fortnum & Mason on London's Piccadilly, selling 20,000 product lines displaying the distinctive patterns which have become synonymous with the brand.

Cath Kidston now has nearly 200 shops across the UK, Europe and Asia, including a store opened in Shanghai last month.

It is unclear whether Ms Kidston plans to sell any of her shares as part of the deal or whether TA will be the only investor to offload its stake.

The company's founder remains actively involved with the business and is not expected to leave after any new takeover. A stock market flotation is not thought to have been ruled out by TA.

Cath Kidston has seen an explosion in sales in recent years, while earnings before interest, tax, depreciation and amortisation rose 13% to £21m for the year to March 31. At a pre-tax level, losses narrowed sharply to £0.6m for the 12-month period.

At the time of the sale to TA, Ms Kidston said:

"We are delighted to have found a fantastic partner in TA Associates whose expertise and international reach will help us to take the business to the next stage of its development. We now have the necessary partner in place to expand the brand internationally in Asia and other markets whilst enhancing our core offer in the UK."

Founded by its namesake in 1993, Cath Kidston has positioned its products as 'affordable yet aspirational', a factor that analysts say has contributed to its success during a tough economic climate and brutal period for UK high streets.

A spokesman for Cath Kidston declined to comment on Friday.

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