TowerBrook announces sale of Phase Eight to The Foschini Group

January 16, 2015

TowerBrook Capital Partners L.P. (“TowerBrook”) today announces the sale of Phase Eight, the premium international womenswear brand, to The Foschini Group (“TFG”), one of the leading independent retail groups in South Africa with over 2,200 stores and 17 retail brands encompassing clothing, jewellery, accessories, sporting and outdoor apparel and equipment, cellular goods and services, and homeware. The transaction values Phase Eight at £238 million.

The acquisition represents an exciting opportunity for Phase Eight to accelerate the brand’s international expansion plans, while at the same time offering TFG access to Phase Eight’s industry-leading management team and an operating model that has proved successful in the rapid rollout of new stores and concessions around the world.

Since TowerBrook’s investment in early 2011, Phase Eight has grown its network from 231 stores and concessions across the UK and Ireland only to 438 stores and concessions across 18 countries, including markets such as Germany, Switzerland, Sweden, the Netherlands, the Middle East, Hong Kong, Singapore, Malaysia and Australia.

TowerBrook Managing Director, Winston Ginsberg, said: “Phase Eight has been a successful investment for TowerBrook. We backed a very impressive management team who managed to nearly double the number of stores and concessions worldwide, growing revenues by 14% CAGR and increasing profitability by 40%. The sale to TFG will enable the business to continue to grow strongly and we wish the management team every success for the future.”

TowerBrook Managing Director Karim Saddi, added: “Phase Eight management has perfected over the years a unique operating model, and built excellent relationships with partners worldwide.  This makes them a very good fit with TFG and its own strategic ambitions.”

Ben Barnett, Phase Eight’s CEO, said “Our 4-year partnership with TowerBrook has been outstanding, with the brand rapidly developing in international stature, alongside continued growth in both sales and profitability. TowerBrook’s support of the management team over this period has been a key factor in our success, which has culminated in the significant investment in the business by TFG. Since our introduction to TFG, we have been highly impressed by the strength of their team, and very much look forward to working with them to further develop Phase Eight to its full potential.”

Doug Murray, TFG’s CEO, said “Phase Eight is an exceptional brand which has developed a culture of excellence and pursued a very successful growth strategy based on strong relationships with its suppliers and department store partners. We are very much looking forward to working with the management team to continue their successful growth strategy.”

TowerBrook was advised by Weil, Gotshal & Manges, Rothschild and Deloitte LLP.