Portfolio update from Electra Private Equity

Electra to make anther distribution

The pandemic has brought considerable challenges to Electra Private Equity (ELTA), with its two largest businesses operating in the retail (Hotter Shoes) and hospitality sectors (TGI Fridays).

In an update this morning, ELTA said that its portfolio companies have and continue to receive significant support from the UK Government. ELTA noted that “this support, comprising rates relief, furlough support, the hospitality industry VAT rate reduction and the ‘Dine out to help out’ scheme, has contributed significantly to the ability of our management teams to respond effectively to the crisis, to the preservation of over 4,000 UK jobs, and the continuation of the resultant tax revenue streams.” 

Hotter Shores creditors approve CVA

ELTA confirmed that the CVA proposal launched on 9th July for its portfolio company, Hotter Shoes, has been approved by 99.5% in value of those creditors who voted, with a majority vote in favour of the proposals from each category of creditor.  

ELTA  expects Hotter Shoes to emerge from the CVA process with its targeted sales channel structure in place and its fixed cost base significantly reduced. This, combined with the delivery of a number of strategic initiatives, including an enhanced web platform launched in June, and the anticipated benefits of enhanced product development and design activity reflected in the upcoming autumn/winter product, leaves the business well placed to face the uncertainties of the current market, in ELTA’s opinion.

TGI Fridays update

TGI Fridays now has 71 of its 85 stores fully open with a further 9 being reopened within the next week. ELTA  says that the remaining stores will reopen as location-specific circumstances develop (e.g. at event-driven destinations such as the London O2). The fund also notes that whilst the future trading environment remains highly uncertain with many competitors yet to re-open, the year on year sales performance and weekly sales progression that they have seen since reopening, combined with the excess capacity that has come out of the market and the early reaction to the new initiatives being implemented by Fridays, give them grounds for optimism.

ELTA: Portfolio update from Electra Private Equity

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