The high street fashion chain Jigsaw has embarked on a pre-Christmas hunt for new owners amid signs of a “cash pinch” at the company and an increasingly apparent retail sector downturn.
Sky News has learnt that Jigsaw’s controlling shareholder, John Robinson, has apppointed KPMG to engage prospective buyers of the business.
Sources said on Friday that Mr Robinson and KPMG were exploring a range of options for Jigsaw’s future, including the sale of a majority or minority stake to another retailer or financial investor.
The company is also in discussions with debt providers about a refinancing, they added.
The timing of the process will provoke speculation that Jigsaw, which trades from about 80 standalone stores, is facing financial difficulties, although insiders insisted that it was trading strongly.
One high street source said the company was facing a “cash pinch” before Christmas, meaning that a sale would need to be agreed before then.
Efforts to find new owners at Jigsaw offer a likely foretaste of the high street’s challenges over the next few months, as rising inflation hits consumer spending power.
Figures published this week by the CBI, the employers’ group, showed retail sales falling at their steepest rate since the last recession, underlining the headwinds confronting many chains ahead of the crucial Christmas trading period.
Import costs have been pushed higher by the weakness of sterling since the EU referendum, while business rate increases prompted trade bodies including the British Retail Consortium to implore Philip Hammond, the Chancellor, to scrap next year’s prospective rise.
Mr Robinson launched the Jigsaw brand in 1970, with its first store opening in Brighton.
Sources said he was “flexible” about the nature of a transaction, with Peter Ruis, Jigsaw’s chief executive, sounding bullish about the company’s potential during a media interview this week.
Jigsaw recorded sales in the year to September of about £100m, up 8% on the previous 12 months.
It is understood, however, to have been affected by significant investment in stores and IT, as well as an unhedged foreign exchange exposure.
A number of other womenswear businesses have also been on the market in recent months, although both Aurora Fashions, which owns Coast, Oasis and Warehouse, and Hobbs have struggled to attract buyers.
A Jigsaw spokesperson said: “Jigsaw has made no secret of the fact it is open to strategic investment to drive ongoing expansion.
“A number of approaches have been made and these are being discussed.
“However, at this stage no sale process is underway.”
Source: Sky