Cath Kidston buys Japanese business
Cath Kidston plots international expansion by acquiring biggest overseas arm.
Cath Kidston, the retailer famous for its floral patterns, has shown a clear sign of its ambitions to expand overseas by buying back its biggest business outside the UK.
The fashion brand has bought its Japanese stores from conglomerate TSI Holdings, which was running Cath Kidston as a franchise in Japan.
There are 31 Cath Kidston shops in Japan, compared to 65 in the UK, but the retailer believes it could almost double in size.
The deal comes after Baring Private Equity Asia bought a substantial stake in Cath Kidston last year to help propel its expansion in Asia. Baring controls Cath Kidston alongside private equity firm TA Associates, while Cath Kidston herself continues to own a minority stake in the business she founded in 1993.
Sanei International, a subsidiary of TSI, was due to run Cath Kidston in Japan until January, and the company now wants to retake control of the brand in what is a key international market.
TSI has run the business since 2011 and sales have grown by 17pc each year, with handbags particularly popular. Japan accounts for one-fifth of Cath Kidston’s sales.
Kenny Wilson, chief executive of Cath Kidston, said: “We believe that over time that we can 50 to 55 in stores in Japan.
“We wanted to get greater control of the brand and we just get closer to the consumer. It is challenging, but it is about putting the right people on the ground.
“I don’t think it is about doing a better job [than TSI]. It is a massive public company in Japan, and they have got a lot of things to focus on. You can do anything, but you can’t do everything. We wouldn’t be arrogant enough to say we are going to do a much better job than Sanei.”
Cath Kidston will take control of the Japanese business in September. The price the company has paid to buy its stores has not been disclosed.
Mr Wilson said the business had enjoyed “new energy and new knowledge” since Baring bought a stake last year.
He also said that running Cath Kidston had been “different” since its eponymous founder stepped down as creative director last year.
“Cath is still there for me,” he added. “There have been a few times this year when I have appreciated her counsel. She said she would be there for me. Her name is above the door.”
Ms Kidston had been “pro” the Japanese deal, Mr Wilson said.