Witchery puts cards on table

NATIONAL: Womenswear retail and wholesale label Witchery may be heading for an expansion explosion after admitting it had drawn a shortlist of up to 10 potential acquisition targets.

The privately owned company, which recently revealed plans to roll out an additional 50 stores over the next five years, has confirmed it had its eye on at least 10 accessory and apparel brands - eight of which it had "looked at closely" over the past 12 months.

The admission, by Witchery chief executive Ian Nairn, comes just days after Witchery owners Gresham Private Equity inked a deal to acquire accessories retailer Mimco.

The purchase, which some media commentators speculated was valued at more than $40 million, is the first major acquisition for Gresham since it bought Witchery Holdings from businessman Peter Lew for $130 million in July last year.

Mimco, founded by David and Amanda Briskin in 1996 and currently employing around 200 staff, operates 17 standalone stores across Australia but is also stocked in 34 David Jones outlets.

Having recently opened the first of several accessories only stores under the Witchery umbrella, Nairn said it was intended the Mimco brand would remain autonomous to avoid "cannibalising" Witchery.

He said Gresham intended adopting an accelerated growth plan for the brand resulting in the opening of 10 new stores nationally each year for the next two to three years.

The aggressive growth strategy would also include an expansion of existing product lines while a move into New Zealand was also on the cards although this is dependent on the success of Witchery in that market.
At its current value, Mimco's acquisition would add "about 20 per cent" to Witchery's bottom line, he said.

Nairn said the opportunity to purchase additional brands was featured in the brand's business plan though he would not confirm which other brands were being looked at or when additional acquisitions were likely to take place.
"We've had a good year. . . and in fact the store openings were going ahead of plan and that is still the case. We put together a plan to see what organic growth we could get out of Witchery and then if we were to consider acquisitions how we would approach that and who would be interested.

"We identified the businesses and we did quite a bit of research as well externally in the marketplace at where brands were positioned and if we were to buy someone how we saw that fitting into our Witchery business and for the future what sort of brands you would want to fit together."

Nairn said his priority at present was to oversee Witchery's retail portfolio expansion and to "bed down" the Mimco business.

It is understood Amanda and David Briskin, who acted as Mimco's creative director and managing director, will remain on board at least until the end of the year after which time a new general manager will be appointed.

By Tracey McEldowney