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Direct Capital invests in Rodd & Gunn
22/08/2008

Direct Capital, through its DCP III and Pohutukawa funds, has acquired a 30% interest in one of Australasia’s leading menswear retail chains, Rodd & Gunn Limited. 

Rodd & Gunn has a retail chain of 55 stores and concessions in malls and on high streets including 34 stores across Australia and 21 stores throughout New Zealand.  The retailer has a long-established brand and targets the premium male customer. Following Direct Capital’s investment, managing director Mike Beagley retains a 70% shareholding.

Mike Beagley is a proven retailer with a track record of creating value in retail businesses and he has successfully grown Rodd & Gunn since becoming managing director in 2000.  Until 2006, Mike was also managing director of footwear business, Hannahs. Mike’s involvement with these two businesses followed a lengthy period with what is now known as the Colorado Group. Mike is well known to Direct Capital through its previous investment in Max Fashions, where Mike was a director.

Tony Batterton led the investment for Direct Capital and commented that, “the investment by Direct Capital is very much about backing Mike Beagley’s retail experience and supporting the continuation of Rodd & Gunn’s store roll-out plan.  We expect to significantly increase the number of retail outlets in Australasia.  Notwithstanding the generally weaker economy, the business benefits from being diversified across New Zealand and Australia and our investment is about growing the business for the long term.  In markets such as this, good brands and retailers really stand out”.    

For Mike Beagley the investment continues a relationship with Direct Capital established through Max Fashions, “I enjoyed the partnership approach Direct Capital took and saw the value private equity added to the business.  Bringing Direct Capital into Rodd & Gunn will be really helpful given the growth we’re experiencing in Australia”.

The company has also added very significant strength to its board with the appointment of Australian based Howard McDonald, as independent chairman. Howard McDonald has over 20 years in senior positions in the Australian apparel market and is a director of department store Myer and prior to that was a substantial shareholder and managing director of Just Group.  The board will also comprise UK based Roger Meadows, who has 30 years in fast moving consumer goods businesses and retail general management with international companies including Wella, Revlon, Faberge and the Body Shop.