PE, Luxury - DD, Internationalization

For a private equity fund – Identification of the opportunities to internationalise a potential acquisition target in luxury retail in the context of a commercial due diligence

The client and context:

· The client is a mid market private equity fund. They were looking at acquiring a French luxury brand specialising in high end shoes.

The challenges:

· The client had commissioned us to perform a commercial due diligence of their acquisition.

· Part of the commercial due diligence was to identify opportunities to expand the business into the UK post acquisition.

What we Did:

· We acquired market data related to the UK from marketing companies and a professional association.

· We conducted a few expert calls as well as a comp-shopping exercise in the UK.

· We performed a standard market analysis of the UK market, and compared it to the French market analysis to perform a market maturity assessment and an evaluation of the potential market to be reached.

· We drew strategic recommendations with regards to the scale and channels to follow for the target’s internationalisation.

What we achieved:

The commercial due diligence has been conclusive and the acquisition took place. The company opened 4 outlets in the UK and developed an online presence. It is estimated that the client can reach an exit multiple of x2.5 to x3, partly thanks to the internationalisation strategy.