TJ Hughes: Navigating a highly complex transaction
TJ Hughes, a 56-strong value department store chain based in Liverpool went into administration in early July 2011. Having acquired the business in March 2011, turnaround specialist Endless had injected significant working capital but the business had continued to suffer against a very tough trading climate. It had subsequently reached the point when administration was the only option.
Swift and complex transaction
GA Europe acquired Endless' debt in TJ Hughes. Completing the deal within a very tight timeframe, the situation was further complicated by the presence of multiple debt holders. Post transaction, we took full control of all TJ Hughes' stores, whilst supporting administrator Ernst & Young in the non-trading aspects of the administration.
Our team's retail operational expertise had an immediate and significant impact upon the chain's trading performance, increasing like-for-like sales by 60%. Specifically, we undertook a full pricing review and put in place a programme of targeted markdowns. Simultaneously, we ran a comprehensive promotional and advertising campaign across local and national radio and print media. And we also augmented stock aggressively, bringing in numerous brands including Gelert outdoor equipment and stock from wholesale operator Makro, which collectively drove additional sales of £3m.
TJ Hughes brand and stores sold to Benross
The considerable improvement in trading performance enabled Ernst & Young to fully explore all options for the business. The TJ Hughes brand and six stores were ultimately sold as a going concern to Benross Group. GA Europe continued to operate the remaining stores before managing a phased closure programme.
The TJ Hughes deal, GA Europe's largest to date, highlighted three of GA Europe's key characteristics - our capability to transact very swiftly, our ability to successfully handle complex situations, and our skill in driving superior trading performance from distressed situations.