Gresham Private Equity
has agreed to buy the Lew family’s 75-store Witchery chain for about
$120m.

It appears that
Gresham sees potential
to grow the 75-store chain into something approaching 300 under new chief Ian Nairn (ex Laura Ashley UK and
Colorado). Roll outs and store spread get harder as
a retailer is positioned on the higher rungs of the taste level ladder. While a
chain of 300+ might make sense for Millers or a jeans business; Witchery is more sophisticated than Jacqui E,
which only has 98 stores. Growth
from Witchery may not come from a bucket of new stores, and will probably stall
well short of 300 if they stick to the current merchandise
mix.

Witchery follows Myer,
Godfreys, Kathmandu, Super A Mart and
Millers down the path to acquisition by private equity funds. Colorado
is the subject of a hostile private equity bid that seemed quite civilised at
the start, but was being described in terms of Barbarians
at the gate yesterday.

There is ongoing
speculation that Oroton, Repco, Just Group and Harris Scarfe might follow. The move of private equity into retail is
being described as an onslaught,
and it may well indicate a fundamental shift in the way many Australian
retailers are owned. However, it also
represents a shift in opportunities for retail managers who may be better able
to perform under a private equity structure, without the handbrake and shackles
of involved and interventionist founders, or worse, their family
members.

The Australianreports
that the Lew family may be considering a bid for Just Group. The Age today speculated,
then scotched, that former Myer chief Dawn Robertson was in the mix to be MD of
Just Group following the departure of Howard McDonald. If Robertson received something like McDonald’s salary of $1.75m, it
would be quite a comedown for someone who was
Australia’s highest paid
retailer.

And what are we to
make of the recent departures of the CEOs of three significant retailers? Were changes at the helm of Just Group,
Oroton, and Colorado coincidental or
portentous?