Ethel Austin ponders £150m float

DISCOUNT clothing chain Ethel Austin is considering a £150m float after more than doubling profits in the past year.

Venture capital backer Lloyds TSB Development Capital (LDC) is also in talks with a potential buyer only 17 months after taking a 68% stake.

LDC funded a £55m management buyout at the 70-year-old retailer of Knowsley, Merseyside, last June.

Like-for-like sales have grown by 8.3% across the group's 250 stores, half of which are in communities away from the High Street.

Operating profits in the 12 months to 31 August soared 158% to £12.5m.

Chief executive Phil Hoskinson said: 'When you are backed by venture capitalists, the venture capitalist is going to exit at some point, and if the company is trading as well as we are that is going to create interest. We did have an unsolicited offer earlier this year. It didn't come to anything but talks are ongoing. But there are different options available, including a secondary buyout or a float. Lloyds may also decide it wants to stay on.'

PricewaterhouseCoopers has been hired to advise the chain on the best course of action.

The founding Austin family holds a 7% stake in the business. Any float would make millionaires of the four executives, who have a 25% interest.

The group's strong community focus has helped it stave off the slower retail environment with its core customers, such as mothers returning from the school run, visiting on average twice a week. Half its stores are inside the M25.