HERALD SUN: Fleur Leyden
A $200 million-plus float of wholesale clothing company Pacific Apparel Solutions could be on the cards as early as next year.
The company, which is 80 per cent-owned by Deutsche Asset Managements’ private equity arm, DB Capital Partners, has beefed up its stable of brands by acquiring The Hopkins Group.
The Sydney-based acquisition houses up-market labels such as Marco Polo, Capital M and Sirocco and bring Pacific Apparel Solutions a step closer to a float or trade sale, believes chief executive Eric Morris.
Mr Morris, a former Myer executive who was in charge of the retailer’s private label operations, said Pacific Apparel Solutions was likely to buy between one and four more companies before a float, depending on how much value they added to the group.
“We’ve got a number of people constantly contacting us in order for us to acquire their businesses and we are really just looking for the right ones,” said Mr Morris.
“It’s a very good time to put a group like this together – in relatively difficult trading conditions – and hopefully we’ve got all our back office co-ordinated, we’ve got the necessary savings and the value added by the time it’s ready to list or exit.”
Pacific Apparel Solutions already generates earnings before interest and tax of $20 million to $25 million, by supplying Myer, David Jones, Target and 1600 boutiques with brands such as Yarra Trail, Black Pepper, Designworks and Breakaway.
Mr Morris said Myer’s recent ownership change was unlikely to affect the company’s supplier status.
He described current industry conditions as “reasonable” and said the trading outlook would be in part tied to Myer’s fortunes.
“I think like everyone else we are hoping that they (Myer) can do away with their discounting structures and get out of the sale cycle that they’re in,” he said. “That would help the rest of the market.”