Retail, Consumer & Leisure
|Sector||Retail, Consumer & Leisure|
|Deal type||Secondary buyout|
|Investment date||August 2007|
|Exit method||Sale to Apax Partners (February 2011)|
Takko is one of Europe’s leading value-fashion retailers, offering customers stylish, quality clothing at attractive prices. Headquartered in Telgte, Germany, the company designs and markets lower-priced apparel and accessories under a variety of popular brands. At the time of Advent International’s investment, Takko had just over 1,000 retail stores in six countries. Within three years, we supported management in growing the store count by 50% and expanding its geographic footprint to 15 countries.
‘A SHAREHOLDER THAT UNDERSTANDS THE DYNAMICS OF THE BUSINESS’
After completing a successful turnaround in the three years before Advent’s investment, Takko had stabilized its operations by 2007 and was once again poised for growth. Management was looking for a new private equity partner that could help take the company to the next stage of its development.
Based on our retail experience and on-the-ground knowledge of European markets, we saw opportunities to build the company—not only through expansion in Germany but also through entry into Central and Eastern Europe. Takko’s focus on value also gave us confidence: the value end of the fashion market had been growing faster than the overall retail sector, a trend we believed would continue.
REPOSITIONING THE COMPANY AND SEIZING GROWTH OPPORTUNITIES
Following our investment in August 2007, we worked with Takko’s management on a major strategic repositioning aimed at elevating the company from a deep discounter, focused on price, to a more upscale value-fashion brand. The new strategy encompassed all aspects of the business, including brand, product range, pricing and inventory management.
The company also embarked on a comprehensive store modernization program, featuring improved visual merchandising, professional space management and standardized store layouts. “We made many of these changes to ensure that our stores reflected the newly positioned Takko brand,” said CEO Stephan Swinka.
At the same time, Advent assisted Takko in executing a plan for organic like-for-like growth coupled with expansion into Central and Eastern Europe. During the Advent-Takko partnership, the number of retail stores increased by 50%, to approximately 1,500, including openings in nine new countries. The company also successfully launched the new “1982” urban-store concept to expand its customer base.
To achieve this kind of growth, we helped Takko add management team members who shared our collective vision for the business and engaged our network of retail advisors with experience in Central and Eastern Europe. Swinka credited Advent with striking the right balance between providing management with freedom to operate and guidance to improve, creating a “professional and fruitful relationship.”
INVESTMENTS DRIVE IMPRESSIVE RESULTS
Our collaboration with Takko generated impressive results even in the midst of a global economic environment that challenged most retailers. In a three-year period, net sales increased by more than 50%, while EBITDA rose by nearly 130%. Store modernization, process improvements and brand-building drove a 40% increase in sales density per square meter of retail space. Net leverage was reduced from more than 5x EBITDA to less than 2x EBITDA.
Following the successful repositioning and implementation of a new strategic plan, Advent completed the sale of Takko to Apax Partners in February 2011.
Ranjan Sen, Advent’s Frankfurt-based general manager, praised the collaborative process that accelerated the company’s growth: “With its strong brand, international presence, integrated business model and promising new retail concept, Takko is well-positioned to thrive in the rapidly growing value-fashion market.”