Reuters: Private Equity: Golfer-turned-banker sees no handicap in Europe

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Golfer-turned-banker sees no handicap in Europe Mar 15th 2012, 14:53 By Lionel Laurent PARIS, March 15 | Thu Mar 15, 2012 10:53am EDT PARIS, March 15 (Reuters) - Economic growth is flatlining in Europe, household spending is in a funk and retailers are cutting prices - the perfect time to invest in consumer brands that can defy the downturn, professional golfer-turned-banker John Penning says. The 39-year-old, who traded in his clubs for a life of finance after mingling with bankers on the putting green, has made his latest private-equity bet in the euro zone, taking over a chain of warehouse stores selling second-hand furniture and electrical goods mainly in France, the Benelux countries and Spain. Penning's Saphir Capital bought Troc, which he describes as a "second-hand IKEA," for under 100 million euros ($130 million). The investment is small compared with the world's biggest furniture retailer, which made more than 200 times that amount in 2010 sales. But the deal is part of a wider strategy for Penning, who also owns a stake in Frey - a French developer of retail parks in France and Spain - and is looking at other opportunities in the French consumer goods sector. "I'm still excited about the euro...What is very good is strong brands," Penning told Reuters at an event to present Troc's strategy, which involves opening new stores and increasing the amount of brand-new goods sold while still retaining a primary foothold in second-hand products. "There is pressure on purchasing power in France and we (Troc) have a low-cost point of entry...We can sell a kitchen for 700 euros to 800 euros ($910-$1,000), new," added Penning, who sees revenue doubling at Troc in the next five years. France's economy is expected to grow 0.1 percent in 2012, while consumer confidence is seen ticking up 0.2 percent, according to a Reuters poll. Bitter memories of President Nicolas Sarkozy's promise to boost French people's purchasing power are weighing on his current reelection campaign. Once Troc's expansion is complete, an established retail network with 400 outlets might even be attractive to Asian buyers, Penning said. Saphir will also revamp Troc's purchasing platform and offer its entire catalogue across several countries on one website, like an integrated eBay. Saphir does not intend to raise more funds for now, preferring to rely on existing resources and money generated from advisory deals. Big buyout houses like BC Partners and Blackstone have seen increased investor caution in the wake of the 2008 financial crisis, which has drawn out the process of raising funds and made it much more complicated. ($1 = 0.7677 euros) (Reporting by Lionel Laurent; Editing by Erica Billingham) Link this Share this Digg this Email Reprints

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