Hunkemöller is up for sale

 Hunkemoller store
Photo: TTStock / Shutterstock.com

Hunkemöller may change owner: investor group Carlyle is attempting to sell the lingerie chain. The timing is unfortunate as demand is falling sharply due to the corona crisis.

 

After just five years

According to Bloomberg, business bank JP Morgan Chase will have to look for a buyer for Hunkemöller next year. The originally Dutch chain was on the market in 2017 when owner Carlyle, an American investor group, tried to get rid of the company through an IPO, but failed to do so. It is worth noting that Carlyle only acquired the business in 2015.

 

Now, the chain is focussing on digitisation, renewing its stores and strengthening its retail network. Just last year, the group announced the intention to expand the store base from 940 to 1,400 branches. This included the opening of 45 Chinese stores in 2019. In the past financial year, revenue rose by 4.4 per cent to 522 million euro.

 

Corona throws spanner

Unfortunately, the corona pandemic throws a spanner in the works. It is not uncommon for retailers owned by private equity companies like Hunkemöller to struggle with high debts. Add lockdowns and a falling demand to the mix and things can get worse. According to De Tijd, a Belgian newspaper focussing on finance and business, the chain is negotiating 371 million euro in bank debts, while the retailer had previously announced to bury their plans of physical expansion. Also, in more mature markets, such as Belgium and the Netherlands, stores will have to close.

 

Hence, the question is whether Hunkemöller will be able to find a buyer in these circumstances. Apparently, auditor Deloitte issued a continuity warning this summer after they reviewed the annual report. The takeover of industry rival Victoria's Secret was called off as well this spring due to the pandemic. Although by now, new candidates are competing for the brand.