New Look: going private with private equity support

Ann-Kristin Achleitner; Eva Lutz; Kerry Herman; Josh Lerner

doi:10.1108/02756661011036691

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Journal of Business Strategy

ISSN: 0275-6668

Online from: 1980

Subject Area: Strategy

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New Look: going private with private equity support

Document Information:
Title:	New Look: going private with private equity support
Author(s):	Ann-Kristin Achleitner, (Center for Entrepreneurial and Financial Studies (CEFS), TUM Business School, Technische Universität München, München, German), Eva Lutz, (Center for Entrepreneurial and Financial Studies (CEFS), TUM Business School, Technische Universität München, München, Germany), Kerry Herman, (Harvard Business School, Boston, Massachusetts, USA), Josh Lerner, (Harvard Business School, Boston, Massachusetts, USA)
Citation:	Ann-Kristin Achleitner, Eva Lutz, Kerry Herman, Josh Lerner, (2010) "New Look: going private with private equity support", Journal of Business Strategy, Vol. 31 Iss: 3, pp.38 - 49
Keywords:	Corporate governance, Employment, Equity capital, Private ownership
Article type:	Case study
DOI:	10.1108/02756661011036691 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Acknowledgements:	The authors are grateful to Martin Clarke, Alex Fortescue, Alastair Miller, Tom Singh and Phil Wrigley for being generous with their time and for providing valuable insights. Furthermore, the authors would like to thank the World Economic Forum for financial support.
Abstract:	Purpose – The purpose of this paper is to present a case study of UK fashion retailer New Look and focuses on the impact of private equity on corporate governance, employment and leverage after the public-to-private conversion in 2003. Design/methodology/approach – This study follows a case study approach to offer in-depth insights into the role of different parties in the deal and their perceptions. The case study is based on semi-structured interviews with key management of New Look, partners of the private equity firms and other members of the New Look board. In addition, complements the analysis with secondary sources (e.g. analyst reports, published articles and financial data of New Look) in order to triangulate our findings. Findings – The case presents an example of a company that pursued a public-to-private transaction with the support of private equity firms. The envisioned transformation process post-transaction turned out to be highly successful with increasing efficiencies and profits as well as an increase of over 3,500 employees over four years. This paper analyses key success drivers and the role of the private equity firms in achieving this success. Originality/value – The paper is the first in-depth case study of a European public-to-private transaction with support of private equity that offers rich evidence on the impact of private equity on corporate governance, employment and leverage.