3i Considers Possible Sale of Agent Provocateur

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Photo: Courtesy of Agent Provocateur

3i may be giving up on a major high-end lingerie retailer.

The private equity firm is exploring a potential sale of Agent Provocateur, which will help the luxury undergarment label recover from financial troubles, Financial Times reported.

Since 2007, 3i has managed Agent Provocateur, which currently sells high-end lingerie and swimwear. The private equity firm appointed Rothschild, an investment bank, to handle the potential sale and is also collaborating with business management consultancy AlixPartners on business improvement options for Agent Provocateur. Sources said 3i could possibly sell the entire company or bring in other investors to revamp Agent Provocateur’s financial outlook and market placement.

Last year, 3i hired KPMG to investigate accounting errors at Agent Provocateur after the company experienced executive changes. In February, Agent Provocateur CEO Garry Hogarth left his post and was replaced by former Dior Homme managing director Fabrizio Malverdi. At the time, 3i was also considering selling the luxury lingerie retailer.

Following the board shuffle, 3i reported its largest writedown for the first half of 2016 in November, even though Agent Provocateur only represents 1 percent of the private equity firm’s portfolio. 3i CEO Simon Borrows noted the accounting problems, lack of consumer interest in the luxury sector and Agent Provocateur’s “inconsistent” store expansion plan at the end of the month.

“We are supporting the new management team to put in place a new strategic plan, which involves a restructuring of the business,” 3i said in a statement. “Agent Provocateur is still a valuable brand and, as part of this restructuring, we have provided further investment of $4.9 million in the quarter to 30 September 2016.”

Although online sales increased by 15 percent from November 2015 to November 2016, Agent Provocateur is still expected to shut down 30 percent of its retail network and axe approximately one-third of its London headquarters staff. Agent Provocateur currently operates 111 stores in 29 countries and may expand to Asia as part of its turnaround plan.


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