Turner, Edward and Alexander, Nicholas and Mouzas, Stefanos (2016) Factors affecting the performance of branded apparel retailers under private equity ownership. PhD thesis, Lancaster University.
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Abstract
Branded apparel retailers are part of a high growth sub-sector in UK retail (PwC, 2016). The growth of this sub-sector has attracted investment from middle market private equity firms (Clark and Bawden, 2011), yet little research has been undertaken into the role that private equity firms play in the growth of these firms. This is surprising given that private equity investors have had a mixed impact on the performance of branded apparel retailers. Using a grounded theory approach (Glaser & Strauss, 1967; Locke, 2001; Charmaz, 2008), this study identifies the factors affecting the performance of branded apparel retailers under private equity ownership. Data was collected from private equity professionals and branded apparel retailers, as well as other industry stakeholders such as corporate finance professionals. From the grounded theory process, the researcher developed a Three-Stage Private Equity Model to demonstrate the factors that affect branded apparel retailers through different stages of private equity ownership. This study makes the following contributions to theory. First, the Three-Stage Private Equity Model provides insight into the private equity and branded apparel retailer relationship. This study provides an in-depth understanding of the factors affecting firm performance. Second, the study contributes to parenting theory by questioning the static nature of the Heartland Matrix (formerly the Ashridge Portfolio Display Matrix). This study highlights that parenting relationships are far more dynamic than the Heartland Matrix suggests. Third, the Three-Stage Private Equity Model is used as a substantive theory to question the value adding and value subtracting mechanism proposed by Campbell et al (2014). The study finds the value adding and value subtracting behaviours identified by Campbell et al (2014) do not fully apply to buy-to-sell parenting relationships. The study contributes to parenting theory by highlighting the differences and similarities between the factors identified within the Three-Stage Private Equity Model and the value adding/subtracting behaviours proposed by Campbell et al (2014). Key Words: Private Equity, Branded Apparel Retailers, Grounded Theory, Parenting Theory.