Bluegem II successfully exits its investment in Liberty through a secondary recapitalization by a consortium of investors led by Glendower Capital

19th July 2019

Bluegem II LP, a European mid-market fund focused on consumer brands, exited its participation in Liberty, the British iconic brand and flagship store, in a secondary recapitalisation led by Glendower Capital, a global secondary private equity manager.

The transaction valuing the company at ca. GBP 300 million enterprise value reflects the work that Bluegem started nine years ago to transform Liberty from a loss-making department store into a vibrant brand and an iconic destination for the most discerning customers in London. 

Bluegem acquired Liberty in 2010 with sales of £63m and EBITDA close to zero and managed it directly until 2018.  Last year’s revenues and EBITDA were respectively £166m and £25m.  More specifically:

  • department store sales increased from £36m to £94m with substantial growth derived from brands that are either new or exclusive to Liberty.

  • investment in digital and online capabilities are starting to drive the omni-channel proposition with online revenues increasing from £1m to £14m and with significant further potential.

  • the fabrics business - for which Liberty has been famous for over 100 years - has been growing at an 11% CAGR since 2010 from £22m to £53m of revenues on the back of its iconic silk-like cottons “Tana Lawn” and an archive of 46,000 patterns, considered a UK national treasure.

  • its own eponymous brand, Liberty London, launched only three years ago to focus on accessories, small leather goods, and sleepwear is already generating £8m of sales.

In order to lead the Company through its next phase of growth, in early 2018 Bluegem brought on board as CEO Adil Khan, former CEO of Luxottica and Wella and ex Vice President Beauty for P&G, while Marco Capello of Bluegem stepped down from the Executive Chairman position and transitioned to the role of non-executive Chairman.

“I am grateful and proud of the team and of their achievements. I am confident we have built a truly differentiated business and assembled a first-class management team that will allow Liberty to reclaim its status as one of the most iconic brands in the world, and the last truly heritage British brand” said Marco Capello, Chairman of Liberty London.

Emilio Di Spiezio Sardo and Marco Anatriello, Partners and co-founders of Bluegem, said “Since the initial acquisition in 2010, Bluegem generated returns across their two funds, Bluegem I and II, of c. 12 times the initial investment.  The secondary recapitalization accomplished two goals: it generated liquidity in line with the expected investment timeframe for Bluegem II as well as certain co-investing LPs, and it provided Liberty and the management team with a shareholders’ base to support its next stage of growth. All the Bluegem Partners co-invested on a personal basis with Glendower. Marco Capello will remain Chairman of Liberty going forward, and this will help Bluegem to remain on top of the emerging trends and brands that are a staple of Liberty’s history. 

UBS advised Bluegem on the transaction.