Lion Capital, the private equity firm, will today announce the appointment of Rose Foster, head of the Monsoon fashion chain, as chief executive of La Senza, the lingerie retailer.
La Senza, which has 118 stores, is also set to be merged with Contessa, another retailer, to form the UK’s second-largest lingerie retail chain with 5.5 per cent of the market.
Theo Paphitis, one of the entrepreneurial judges on the BBCTV show Dragons’ Den, sold La Senza to Lion Capital in July and has agreed terms to sell Contessa, which has 66 stores, to the private equity firm.
Lion Capital has said that it wants to develop La Senza in the UK and through further expansion in Europe, where the firm currently has just 14 franchise stores in countries including Denmark and Norway.
La Senza, which sells ownlabel lingerie, has increased sales by 13 per cent a year in the past three years after a turnaround spearheaded by Mr Paphitis, who bought the firm for £1 in 1999.
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Ms Foster has become the second senior executive to quit Monsoon in the past three months, amid rumours that Monsoon’s founder, Peter Simon, plans to buy out the retailer’s international division.
The rumours have increased in recent weeks after Monsoon, which is listed on the Alternative Investment Market (AIM), changed its advisers from Numis to Seymour Pierce. Mr Simon is understood to have hired a headhunting firm to find a replacement for Ms Foster who is set to leave in May.
Ms Foster’s departure for the much smaller La Senza business is a blow for Mr Simon and will add further fuel to the rumours about the founder’s plans for Monsoon.
If he is able to buy out the international business he would effectively cut off Monsoon’s future growth prospects, leaving only the UK chain, which is believed to be suffering a sales downturn at present.
Ms Foster’s resignation has already been controversial as the announcement came just days after the company disclosed that she had sold all her 97,078 shares in the company for as much as 391p a share.
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Experts believe that the London Stock Exchange, which regulates the junior AIM market, will be closely examining the sale of Ms Foster’s shares because Monsoon did not announce the sale until November 15, despite the fact that Ms Foster informed the company on November 8, according to the firm’s Stock Exchange announcement. AIM rules require immediate disclosure of directors’ share dealings. Regulators will want to know if Ms Foster, who says she put her stake up for sale at the end of September, already had plans to resign when she sold the shares.
Lion Capital and Monsoon declined to comment.
More or less
La Senza and Contessa:
187 stores
£78.1m combined turnover
£8.2m* combined pre-tax profit
Monsoon:
400+ stores
£485.3m turnover
£53.46m** pre-tax profit
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*for 2005.
** for year to May 27 2006