Card Factory on brink of sale in £350m private equity deal

Charterhouse is in advanced negotiations with the Wakefield company and the transaction could be completed as soon as today.

The deal would see the venture capitalist take a majority stake with the existing management continuing to run the business.

It will also generate a multi-million pound windfall for Mr Hoyle, the 42-year-old chairman of Huddersfield Town Football Club, who is believed to own 90 per cent of the business.

The Card Factory has 480 stores, 4,500 staff and serves more than 100 million customers a year. It is regarded as one of Yorkshire's biggest business success stories of recent years.

Confirmation that Mr Hoyle was putting the business up for sale – as revealed in the Yorkshire Post last November – aroused massive interest from potential buyers.

Buyout firms Permira, Cinven, Summit Partners and Warburg Pincus were linked with bids, but Charterhouse's position as front-runner was not known until yesterday.

According to latest figures, Sportswift, which trades as the Card Factory, increased its turnover to 167m in the year to January 31, 2009 and its pre-tax profit to 29m.

Previous figures put turnover for the seven months to the end of January 2008 at 90m, with a profit of 17m.

Mr Hoyle and his wife, Janet, founded the greeting cards business in 1997 when they opened their first shop in Wakefield.

The path to success has not always been easy, and in the early days cash flow was a problem because the company was rapidly expanding.

Restrictions in the supply chain as the company grew were also an obstacle.

In the past four years, Card Factory has taken control of the whole process from card design to retail, a decision Mr Hoyle said he was forced to make after his suppliers tried to force up his prices while restricting the quality of product they were selling him.

Mr Hoyle's confidence in the business was reinforced when his bank manager Richard Hayes decided to leave the bank and asked to join the company. He is now managing director and will continue to lead the business under the new owners.

In 2008 the company took over 74 stores from rival card retailer Celebrations Group, which owned the Card Warehouse and Card Fair brands, after it went into administration.

Mr Hoyle attributes Card Factory's success to its combination of quality and value.

In an interview with the Yorkshire Post last November he said: "If people could shop in Harrods and pay Netto prices, that is the perfect scenario and we're trying to give that kind of experience."

Two years ago Mr Hoyle decided to step back from running the company to spend more time with his two children and in his role at Huddersfield Town FC chairman. He told the Yorkshire Post: "When you speak to people in business they always say they enjoy their grandchildren more than their kids because they were too busy building up their business. I'm 42 and I've done very well for myself. If I don't spend time with my kids now there's only one person to blame so I'm going to make sure I see them grow up properly."

The management team currently includes Mr Hayes, group finance director Darren Bryant, formerly the corporate finance partner for Yorkshire at PricewaterhouseCoopers, and logistics director Christopher Beck, who used to work at Grant Thornton in Leeds.

Last December, Card Factory picked up the Board of the Year award at the Variety Club Yorkshire Business Awards, supported by the Yorkshire Post.

Mr Hoyle was also named Ernst & Young Retail and Consumer Products Entrepreneur of the Year in 2009.

He was unavailable for comment last night. KPMG, which is handling the sale process, declined to comment as did Mr Hayes and Charterhouse.

Inherited determination pays big dividends

Dean Hoyle believes he inherited the determination to succeed from his mother, a single parent who had to fight to keep him when he was a baby.

He told the Yorkshire Post last November: "I was due to be adopted when I was born but my mother decided to keep me. She was shunned and cast to one side because she was a single mother but she had a strong willpower and I think that's probably came through to me, to be honest. I've got determination."

Mr Hoyle left school in Heckmondwike with no qualifications because he said he was too interested in football to learn.

He moved into a career in engineering but gave it up to establish a business selling cards out of the back of a van.

In 1997 he set up a shop in Wakefield with his wife Janet, which went on to become the Card Factory brand.

The first day he opened the shop was nerve-racking.

"We opened the store at 9am and at 9.15am one old lady walked in and I thought, 'The pressure's on here'. I actually went upstairs, because I couldn't handle it.

"At 9.45am my wife shouted up to me. I went downstairs to see what she wanted and as I turned the corner the shop was absolutely jam packed."