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Published 09 October 2012 10:44, Updated 10 October 2012 04:51
Active: Owner Lorna Jane’s expansion plans for the United States are anything but relaxed
If you’re going to be a small fish in a big pond, it’s best to have someone on your side with a lot of friends who knows how the big pond works.
That’s the theory active wear retailer Lorna Jane will take as it expands into the United States.
While Lorna Jane has already started to roll out stores in the US – it’s opening two in California this week to take its total in that body-conscious state to 10 – its strategy should gain momentum when it forges a partnership with a Stateside private equity firm.
Lorna Jane chief executive Bill Clarkson can’t be too specific when he talks about future private equity partners because it will be up to incumbent private equity investor CHAMP Ventures to decide what it will do with its stake. CHAMP took a majority stake in the company in March 2011, so the three-year window so critical to private equity is not far away.
“When you consider we want to grow 150 per cent in the next three years, an American private equity firm has to come into play … it’s fairly obvious that CHAMP will be thinking of an exit at some point towards the end of next year,” Clarkson says.
By the end of 2015, Clarkson wants Lorna Jane to have a valuation between $700 million to $1 billion, with a turnover in the realm of $350 million a year. The company will end this year with a turnover of about $150 million, he says.
Lorna Jane’s US strategy is to come out all guns blazing, opening stores beyond California in Texas, Colorado and Arizona next year.
Wary of becoming too big too quickly, Clarkson expects to reduce the number of Australian stores from 120 to 100 over the same period, relying more on an online presence whose sales now account for the same amount of revenue generated by 20 physical stores.