The Blackstone Group has said that they are not interested in buying The Good Guys after earlier reports that the US investment group was close to buying the retailer for a reported $1 Billion dollars.What is not known is whether the group have evaluated The Good Guys, and rejected the notion of buying the retailer, due to the potential of bricks and mortar retail coming under pressure from online sales or whether the group only had a “passive” interest in the retailer in the first place.
Last week several organisations said that they were “aware” that Blackstone had been talking to The Good Guys and that a deal was imminent.
Now it emerges that the consumer electronics, IT and appliance retailer may not be doing as well as first thought with the CEO of one major retail group claiming that the business is not worth the $1B asking price.
The CEO of a major retail chain (not JB Hi Fi or Harvey Norman) who competes with The Good Guys said: “We track the group and, of late, they have not been doing as well as they have done in the past. They are definitely not worth $1billion dollars in this market. Anyone looking to buy the group is going to realise that there is potential for retail sales to be stripped away to overseas online operators”.
The 97 store operation is owned by Muir Investments which in turn is owned by Andrew Muir, his mother, Joan and sister Carolyne.
Claims that profits for the business at July 2010 were believed to be $106 million in earnings before interest, tax, depreciation and amortisation have now been disputed by several people who contacted ChannelNews including a Good Guys store operator who said “The revenues and profits being talked about are significantly lower. I suspect that the revenue is more $1.8 million and profits of sub $100M.
According to sources, the company started talking to investment bankers and private equity companies early in 2010.
