UK's Allied Carpets Purchased by Investment Fund

London, England, March 24, 2009--Allied Carpets, the UK's second-largest flooring retailer, has been acquired by an offshore investment fund, for an undisclosed sum.

Sigma Capital Investments is understood to have identified long-term value in the 218-store carpet retailer, although it is likely to want to close some stores.

The deal is a major fillip for the sector as it shows that investment funds are prepared to invest in struggling UK retailers. The offshore fund is backed by wealthy US investors.

Speculation had been swirling around Allied Carpets since its French owners put it up for sale before Christmas, hiring Lazard to the handle the process.

The private equity arm of Hilco, the restructuring specialist, and Merchant Equity Partners, the private equity firm and former owner of MFI, the collapsed retailer, initially expressed an interest in buying Allied Carpets, but talks did not progress.

Allied Carpets has struggled to compete with the market leader Carpetright and has not made an operating profit for the past eight years, according to Retail Knowledge Bank.