Hector Russell Sold

[Sherry]

http://www.theherald.co.uk/business/48786.html
Hector Russell sold to EWM
SIMON BAIN October 13 2005
Edinburgh Woollen Mill has bought the Hector Russell highland dress business from entrepreneur Mike Cantlay with a view to developing a new market in lower-price kilts.

EWM, in expansion mode following a refinancing, has 300 stores throughout the UK and plans to develop the Hector Russell brand nationally as well as taking on the group's four well-located stores.

Cantlay, who sold the Whisky Shop in Glasgow two years ago, is a former chairman of Forth Valley Enterprise, and recently stepped down as deputy chairman of VisitScotland. He took over Hector Russell in 1993 and will hang on to its operations in the US and Canada alongside property interests.

He has 16-month-old twins, and said: "I will still have four businesses to run, but this is an opportunity to spend a bit more time looking after my young family."

Cantlay said discussions with EWM had been going on for some time. "I was only happy to sell the business as and when I became confident that EWM would continue the tradition of the business, retain the staff, expand the brand, and grow the branch network. It is my personal view that prices in the highland dress industry have been rising well above that which the customer should be expected to pay."

The acquisition would "herald a new era for the industry, which will see kilt outfits become affordable to a whole new generation of Scots".
Russell has brought the price of a full outfit down to under £500, but EWM plans to reduce that further.

David Houston, finance director, commented: "There is a big market but price has been an obstacle. Some people have been charging a lot of money for hire, but by bringing down the overhead price people are more likely to purchase."

EWM has grown its store network from 285 to 300 this year, and recently reported a sharp rise in underlying profits in its second full year of trading since a 2002 secondary buy-out saw management take control.

EWM's high street business grew by only 1% last year, but the larger "destination" outlets, which contain other retail brands, grew by 8% as overall sales were flat at £153m.

Philip Day, chief executive of EWM, said it had acquired "an excellent brand, knowledgeable staff and a long-established reputation of authority in traditional Scottish products".

He added: "As the majority shareholder of EWM who along with my senior team together own 75% of the group, it is our intention to grow both organically as well as by acquisition.

"It is, however, our intention to remain private for the foreseeable future."
Day said that following the refinancing, the group had "the necessary funds for this and other potential acquisitions".

Cantlay added: "I have thoroughly enjoyed being involved with Hector Russell and the business is not in difficulty – quite the reverse. Driving down the kilt package price is something I have focused on and EWM now have the opportunity to play a substantial role in getting better value for the customer."

Sherry

[Edited for better readability.]