Sale sees Ghd going for more global growth

A YORKSHIRE-based hairstyling brand which counts Katy Perry among its celebrity fans is set for further global expansion after gaining new owners.

Yesterday, Montagu Private Equity revealed that it had reached an agreement to sell Jemella Group, which trades under the ghd brand, to Lion Capital, the consumer-focused investment firm for an undisclosed sum.

Ghd – which stands for ‘good hair day’ – was established in Silsden, West Yorkshire, in 2001 by chemist Martin Penny, plant-hire specialist Gary Douglas and hairdresser Robert Powls.

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In recent years, the company has seen its turnover soar on the back of celebrity endorsements from stars such as Ms Perry and Gwyneth Paltrow.

The company’s upmarket styling irons have proved popular among hairstylists because of their curved barrels and ceramic plates. This means that women can use the irons to change their look, without damaging their hair.

Sales of the irons rose from just 20 per week to more than 20,000 a week between 2001 and 2003.

Montagu acquired ghd in 2007 for £160m and focused on delivering growth by expanding into new markets and investing in research and development. Ghd has proved a hit with consumers in the US, European and Australasian markets.

The company’s profits have more than doubled under Montagu’s ownership to more than £32m on revenues of more than £150m. It’s achieved annual sales of more than two million units.

Simon Pooler, director at Montagu Private Equity, said: “Our sale of ghd to Lion marks the completion of another successful investment for Montagu and we are very proud to have partnered with the company over the past six years. We were originally attracted by the strength of the ghd brand and its remarkable customer loyalty.

“We also saw excellent potential to continue its growth in international markets and great opportunity to develop its new product range and sales channels. Ghd is now a truly global market leader, with an enhanced ability to innovate and grow.”

Lyndon Lea, a partner at Lion, said: “Since its very early days, ghd has proved itself to be an iconic brand that engenders a deep emotional attachment and loyalty among its customers... We look forward to working closely with the management team to accelerate growth in the business through increased investment behind the brand, new product development and expansion of both international and alternative sales channels, in particular online.”

Paul Stoneham, the chief executive of ghd, which is based in Bridgewater Place, Leeds, said: “Our partnership with Montagu has been a great success and enabled us to build the ghd brand, develop new proprietary technology, create a strong digital presence, expand internationally and enter new hair care categories. We look forward to accelerating ghd’s development in close partnership with Lion Capital, with whom we share a common vision and passion for growth.”

Montagu and ghd were advised by Ernst & Young. Lion Capital was advised by Rothschild. Financing is being provided by Lloyds.

Co-founder Martin Penny launched a High Court legal action against Montagu in November 2011, claiming that he was unfairly ousted in a boardroom coup in December 2008.

In March last year, the Yorkshire Post reported that Montagu and Mr Penny had reached a settlement in early January 2012.

A spokeswoman for Montagu would not discuss the terms of the agreement, when contacted by the Yorkshire Post in March 2012. Mr Penny also declined to comment.

When asked to comment about the sale of the business, Mr Penny said yesterday: “We had fantastic success with the brand. You’ve got to think that the company is in strong hands (with Lion Capital). I would hope that they would want to expand the business.”