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New Look: going private with private equity support

Ann‐Kristin Achleitner (Center for Entrepreneurial and Financial Studies (CEFS), TUM Business School, Technische Universität München, München, German)
Eva Lutz (Center for Entrepreneurial and Financial Studies (CEFS), TUM Business School, Technische Universität München, München, Germany)
Kerry Herman (Harvard Business School, Boston, Massachusetts, USA)
Josh Lerner (Harvard Business School, Boston, Massachusetts, USA)

Journal of Business Strategy

ISSN: 0275-6668

Article publication date: 4 May 2010

Abstract

Purpose

The purpose of this paper is to present a case study of UK fashion retailer New Look and focuses on the impact of private equity on corporate governance, employment and leverage after the public‐to‐private conversion in 2003.

Design/methodology/approach

This study follows a case study approach to offer in‐depth insights into the role of different parties in the deal and their perceptions. The case study is based on semi‐structured interviews with key management of New Look, partners of the private equity firms and other members of the New Look board. In addition, complements the analysis with secondary sources (e.g. analyst reports, published articles and financial data of New Look) in order to triangulate our findings.

Findings

The case presents an example of a company that pursued a public‐to‐private transaction with the support of private equity firms. The envisioned transformation process post‐transaction turned out to be highly successful with increasing efficiencies and profits as well as an increase of over 3,500 employees over four years. This paper analyses key success drivers and the role of the private equity firms in achieving this success.

Originality/value

The paper is the first in‐depth case study of a European public‐to‐private transaction with support of private equity that offers rich evidence on the impact of private equity on corporate governance, employment and leverage.

Keywords

Citation

Achleitner, A., Lutz, E., Herman, K. and Lerner, J. (2010), "New Look: going private with private equity support", Journal of Business Strategy, Vol. 31 No. 3, pp. 38-49. https://doi.org/10.1108/02756661011036691

Publisher

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Emerald Group Publishing Limited

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