The price is not right for RAG

SYDNEY: Menswear retail giant Retail Apparel Group (RAG) has knocked back an offer from private equity firm Catalyst Investment Managers, citing financial differences.

The privately-owned group, formerly trading as Tarocash Enterprises, confirmed three months of negotiations had fallen through with Catalyst after owners were unable to offer the "right" price. RAG chairman Stephen Leibowitz declined to reveal the value of the financial offer but said he was still open to considering future propositions.

It is understood private equity player Champ Ventures currently owns close to 40 per cent of the group.  "I am always interested in offers for any asset I own, however, there is no time to sell if you do not believe the price is right," he said. "[Right now], we are focused on growing our three brands."

The Sydney-headquartered company, which owns and operates retail chains Tarocash, YD and Connor, planned to open 44 sites across Australia over the financial year with a view to "doubling" this is the next few years. Leibowitz said the group had just recorded its "best financial year ever" with a profit growth of 32 per cent and a top line sales growth of 28.5 per cent.

Although he admitted booming petrol prices could impact on business in the current financial year, he claimed global economic uncertainty had yet to cause problems for RAG's retail portfolio.

"We can see the effect in the marketplace however the bulk of our business is targeted at the 20 to 30 age group, which is not usually affected as much by interest rates and economic trends," he said. "There is an opportunity to double the number of stores we have in the next few years and we have identified these centres and locations by brand. We have the resources - both people and financial - to make this happen."

RAG was formed in early 2007 after the acquisition of menswear chain YD and the launch of Connor. The group has consolidated its Tarocash, YD and Connor brands under one roof by relocating to an 1800sq metre office in Waterloo. 

By Assia Benmedjdoub