Re: Re: Arnotts
You are a touch harsh; from a turnover of €150m a net margin of c10-15% should have been acheivable. Without the interest burden imposed by the €250m MBO I have no doubt the enterprise would not only have survived but have thrived because Arnotts is a very good retailer.
You would hope that the company in time recover to a €10m – €25m net profit level and be released back into the market when 3 years of solid returns are securely lodged with the Companies office this would give the banks a very safe exit. To me the Arnotts story is not unique; it is very clear that leveraged buy outs in retail are not a clear road to success but 7-10 years ago they seemed very attractive to many private equity houses and investment banks.