Country Road moves in

Fashion chain retailer Country Road has responded to reports concerning its possible buyout of the Witchery Group.

The announcement follows industry speculation that African retailer Woolworths and its 87.88 per cent-owned Australian subsidiary Country Road, is interested in buying Gresham Private Equity’s Witchery and Mimco fashion brands.

Although Country Road failed to give concrete details, the retailer has now confirmed in a statement that the two companies are in preliminary talks.

"Country Road is aware of media speculation concerning a possible transaction with Gresham Private Equity in relation to the Witchery Group. [However], discussions with Gresham Private Equity relate to proposals that are incomplete, confidential and nonbinding and there is no certainty that a transaction will take place."

The news follows Gresham Private Equity's continuing attempts to sell the fashion brands, after first putting them on the market more than a year ago.

Last year, the company also confirmed it had plans to float the fashion group via an IPO (initial public offering), in a deal worth around $300 million. However, this was later put on hold due to the tough trading environment.

Gresham Private Equity completed the acquisition of retailer Witchery Fashions Pty Limited in August 2006.

Country Road is listed on the Australian Stock Exchange and operates in Australia and New Zealand.