New heights for Mountain Warehouse following management buyback

The management team of specialist outdoor retailer Mountain Warehouse has completed an £85million acquisition of the business backed by Royal Bank of Scotland and Alcentra.

The transaction enables the team, led by founder and CEO Mark Neale, to take full ownership of 169-strong chain, while providing an exit for its mid-market private equity backer LDC which acquired a significant minority shareholding in August 2010 as part of a £47million buyout. The transaction delivers a strong return for LDC, more than doubling its original investment within three years, during which time the business has traded through two recessions.

Mountain Warehouse has grown strongly over the three years of LDC’s investment despite the challenging consumer environment, with turnover rising from £47.5million to £75.6million in the year ending February 2013. The retailer has opened 60 stores and created over 500 jobs in the period.

Mark Neale, CEO of Mountain Warehouse, said: “We have had fantastic support from LDC in helping us expand the business despite tough market conditions. Having had four private equity investors over the last 16 years, we have now taken the opportunity to buy back full control and to push ahead with our exciting expansion plans. I am delighted that RBS and Alcentra are backing the team for this important next phase of growth.”

Mark Neale said that he now sees potential to expand to 300 stores across Europe as well as to continue to grow its fast-growing online business which is now shipping to more than 100 countries. Mountain Warehouse already has six stores in Poland and more openings are planned there.

The company was founded in 1997 by Mark Neale with its first store in Swindon. It now targets market towns and locations popular with walkers and tourists and continues to see plenty of potential in many towns around the UK. Several of its stores are in former Woolworths sites. New stores have recently opened in Harrogate, Whitstable and Totnes.

The current financial year for Mountain Warehouse is continuing to deliver a very positive performance with like-for-like sales showing around 10% uplift despite the hot summer. Online sales have more than doubled in the year to date.

Chris Hurley, CEO at LDC, said: “Mark and his team have delivered a strong performance in some of the most difficult conditions the retail sector has seen for many years. Thanks to a clear strategy, a highly capable team and a strong proposition, they’ve taken the business to the next level where it can now continue to grow and develop.”

Vendor due diligence was completed by Deloitte (financial) and Pragma (commercial).

Notes to Editors

  1. LDC is the private equity arm of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority.  
  2. LDC backs ambitious management teams from UK-based medium sized companies seeking up to £100m of investment to fund management buyouts or development capital transactions.
  3. LDC invests in a broad range of sectors and has particular experience in Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure, Support Services, Construction & Property and Financial Services.
  4. LDC has a UK regional network with locations in Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Newcastle, London, Manchester, Nottingham and Reading.