The Works, a discount stationery and books retailer owned by turnaround private equity firm Endless, is readying to be sold or floated next year.
Endless has enlisted the help of bank Investec to begin preparing a sale or listing, the Sunday Times reported.
Since buying the business out of administration in 2008, reportedly for around £17m, the firm has increased the number of stores from around 200 to almost 400. Underlying earnings in the year ending May 2016 grew by 37 per cent to £12.7m, as sales increased by nine per cent to £154.4m.
The news follows Endless’s sale of The West Cornwall Pasty Co. earlier this year, a fast food pastry retailer which the firm also bought out of administration and which generated an impressive 5.5 times return on money invested.
Both moves come despite warnings of slowing consumer spending, as YouGov last month measured consumer confidence at its lowest level since immediately after the Brexit referendum.
With inflation overtaking wage growth in the first quarter, the signs for consumer businesses look ominous.
Yet The Works is undoubtedly in a happier financial state than it was nine years ago, when an aggressive expansion strategy backfired due to poor store performance. Just three years before Endless took the business off the hands of Kroll, a restructuring firm which was appointed administrator, Hermes Private Equity had bought the business for £50m.
Over the course of its short hold, Hermes injected more than £28m into The Works.