Key Capital unlocks growth for Dwell

THE Birmingham office of private equity firm, Key Capital Partners, has provided £5m expansion financing to contemporary furniture and home accessories retailer, Dwell, in return for a minority stake in the company.

The consumer team at Clearwater Corporate Finance advised Dwell, while the corporate team at Cobbetts advised KCP.

The investment from KCP will support the significant expansion of Dwell’s store estate as the company plans to launch 33 new high street outlets over the next four years – taking its total number of UK stores to 52 by 2014.

Dwell currently has 19 stores, including its recently opened flagship location on Tottenham Court Road, London. The company also has a presence in Birmingham, with a store at Fort Dunlop and a concession at Selfridges in the Bullring shopping centre. There are also outlets in Manchester and Nottingham.

Total sales from the company’s high street, online and catalogue channels totalled over £25m in the year to January 31, 2010. During the year, the company made a significant investment in its senior management team in order to drive its four-year expansion strategy, boost operational efficiencies and enhance profitability.

Neil McCausland, current chairman of Kurt Geiger, TJ Hughes and Skin Clinics, was appointed as chairman, while Simon Tutt joined as finance director, having previously held roles at women’s fashion provider Elvi and furniture retailer Harveys.

Robyn Clifford, former head of buying and merchandising for own brand products at luxury department store Harrods, also joined as buying and merchandising director.

Following these key hires, the implementation of new finance and merchandising processes saw turnover increase by 15% in the last six months of FY10, following a challenging first half.

The KCP team comprised partners Owen Trotter and Andy Gregory. Birmingham-based Mr Trotter, who joins the board of Dwell as non-executive director, said: “The challenges facing UK retail over the last two years have been well documented, but Dwell has emerged from the turbulence in a far stronger position due to its first class management team and proven product offering.”

Aamir Ahmad, founder and managing director of Dwell, said: “This capital injection from KCP represents the next milestone in Dwell’s development, having strengthened the management team last year in anticipation of both this investment and our aggressive four-year growth strategy.”

Dwell was advised on the transaction by the consumer team at Clearwater Corporate Finance, comprising partner Marc Gillespie, director Gareth Iley, assistant director Richard Shaw, and industry adviser Jackie Naghten.  

The corporate team at Cobbetts, comprising partners Adrian Cutler and Sean Fitzgerald and director Victoria Zivkovic, provided legal advice to KCP. Partner Graham Elsworth and assistant director Louise Chubb at the Birmingham office of BDO provided KCP with financial due diligence.

Partner Tim Hewens and solicitor Alistair Francis at Hammonds provided legal advice to Dwell, while Miriam Lampert provided employment law advice.

Javelin’s COO, Richard Wolff, and director Michael Fine provided commercial due diligence, while Paul Quinn of the Quinn Partnership provided management due diligence. Insurance due diligence from Heath Lambert was provided by practice leader, Victoria Railton.