Global investment firm The Carlyle Group has acquired a majority stake in U.K.-based luxury, streetwear and sportswear retailer End for an undisclosed sum. A Bloomberg report values the retailer post-purchase at more than 750 million pounds (approximately $1 billion).
Carlyle says it will support End’s expansion within both the domestic U.K. market and internationally. Global expansion is a core component of the private equity firm’s growth strategy for brands.
Interestingly enough, End generated annual revenues of 170 million pounds ($234 million) as of March 31, 2020, with 65 percent already coming outside of the U.K., Carlyle said. The retailer also currently ships to over 100 countries worldwide.
According to U.K. corporate filings, End’s revenue represented a 27 percent jump over the prior year, while net profit climbed 20 percent to 26 million pounds ($36 million). Annual fiscal numbers for the past year, which would be heavily impacted by the Covid-19 pandemic, have not yet been released.
Founded in 2005 and headquartered in Newcastle, U.K., End features luxury and contemporary men’s fashion, largely selling sneakers and streetwear, in partnership with 500 designers and brands, including names such as Gucci, Saint Laurent, Burberry, Givenchy, to Fear of God, Off-White, The North Face, Nike, and Adidas.
Originally starting with its Newcastle store and an e-commerce presence, End has expanded to two more brick-and-mortar locations, first in Glasgow, Scotland, and another in London. The retailer brings the online experience to the stores by enabling shoppers to use iPads to can shop endclothing.com in store. The stores also offer exclusive launches and product drops that are typically associated with the End e-commerce site.
While End’s streetwear and sneaker offerings are mostly geared towards men, the company is entering women’s wear in the future.
Carlyle made two major fashion exits in 2020, selling both its 50 percent stake in Supreme to VF Corp. in a $2.1 billion deal and its majority ownership stake of Italian luxury footwear brand Golden Goose to Permira for 1.28 billion euros ($1.4 billion).
If the exits are any indication, End could be in for a very promising next few years.
Both Supreme and Golden Goose saw significant growth under Carlyle—the firm acquired a 50 percent stake in Supreme from founder James Jebbia in 2017 for $500 million. While annual revenue was approximately $200 million upon the purchase, it since increased to $500 million by the time of the sale. For Golden Goose, revenues grew from 100 million euros ($118.5 million) in March 2017 to estimated revenues in excess of 260 million euros ($308 million) by February 2019.
Carlyle is acquiring the stake from End’s founders Christiaan Ashworth and John Parker, who will both retain a significant minority stake and remain co-CEOs of the company. Index Ventures, which currently holds a minority stake, will fully exit. The transaction is expected to close on April, 1, 2021.
“We are thrilled to welcome Carlyle as our new partner. Their experience and strong track record in luxury and streetwear will be invaluable to us in supporting End’s long-term and sustainable growth strategy,” Ashworth and Parker said in a joint statement. “Carlyle’s industry knowledge and truly global platform will be instrumental as END. continues to reach an increasingly international audience. We’d also like to thank Index Ventures for being a fantastic partner and great to work with over the last seven years.”
Currently, End employs more than 650 people in the U.K.
As of Dec. 31, 2020, Carlyle has $246 billion of assets under management, with $20 billion invested in consumer brands.
Equity for the investment will be provided by Carlyle Europe Partners (CEP) V, the firm’s 6.4-billion-euro ($7.6 billion) fund focused on European investments, as well as an affiliate of Carlyle Asia Partners (CAP) V, a $6.6-billion fund focused on investments in the Asia-Pacific region.
“We are attracted to END.’s distinctive style, which mixes luxury and contemporary brands with the best in sneakers and sportswear,” Massimiliano Caraffa, managing director, consumer and retail, Carlyle Europe Partners advisory team, said. “We are excited by the many growth opportunities that lie ahead for the company, including the launch of women’s wear as well as further international expansion.”
The Carlyle Group was advised on the sale by Morgan Stanley and RBC, while End turned to Goldman Sachs to find a majority investor.