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Tue 25th May 2021 - Sky News – Luke Johnson set to make fresh £250m bid to sell resurgent Gail’s chain
Sky News – Luke Johnson set to make fresh £250m bid to sell resurgent Gail’s chain: Sector investor Luke Johnson is set to make a fresh attempt to sell Gail’s Bakery, which has seen a sharp sales rebound despite the pandemic’s impact on the sector. Johnson’s private equity vehicle, Risk Capital Partners, has asked bankers at Nomura to conduct a review of strategic options for Bread Holdings, the parent company of Gail’s retail business and its central craft bakery, reports Sky News. Industry sources said they anticipated Gail’s could command a price tag of up to £250m, with expectations for revenue in the current financial year to exceed pre-pandemic levels and profitability to hit a record high in the 12 months to next February. Gail’s now trades from 68 outlets, with plans to open dozens more sites – taking the total to more than 100 – during the next three years. It specialises in selling a range of premium sourdough breads, pastries and cakes, alongside coffee and a hot food offer prepared in-store. Larger private equity firms are expected to show an interest in acquiring the business, which is bucking the trend of a sector that has seen mass closures, insolvencies and financial restructurings in recent times. Johnson, who confirmed Nomura’s appointment on Tuesday (25 May), is one of the country’s most prolific hospitality investors, having backed restaurant chains including PizzaExpress, Giraffe and Strada during the past three decades. He also chairs The Brighton Pier Group, the listed operator of the eponymous attraction as well as a number of bars around the country. In 2019, Johnson also tried to rescue Patisserie Valerie, the business he was then executive chairman of, following an accounting fraud. Johnson provided a £10m emergency loan to keep it out of administration, but the deepening scale of the crisis led to its collapse and break up. The entrepreneur has enjoyed better fortunes since then with Marriott International’s £101m takeover of Elegant Hotels, a luxury Caribbean hotels group listed on the London stock market that was backed by Johnson. His private investment vehicle also bought bowling business All Star Lanes out of administration. His renewed exploration of a sale of Bread Holdings comes after earlier flirtations with an auction process. Risk Capital holds a big stake in Bread Holdings, alongside management team members including chief executive Tom Molnar, who established the business with Ran Avidan, naming it after Gail Mejia, who was a supplier of premium bread to restaurants. Its first site opened in Hampstead, north London, in 2005. Johnson invested in the company in 2011. Its retail operations are concentrated in affluent locations with high footfall, with its branches distributed across London and south east England.


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