Retail

Conservative MP Nadhim Zahawi appointed chair of The Very Group


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Former UK chancellor Nadhim Zahawi has been appointed chair of online retailer The Very Group, which is owned by the Barclay family, days after announcing his intention to stand down as an MP.

Zahawi will replace non-executive chair Aidan Barclay, who assumed the role as a family representative on an interim basis in February. The update comes after the YouGov co-founder said last week he would not seek re-election as a Conservative MP at the next general election.

His brief is to work with the current management team “to achieve continued sales and profit growth”, the company said in a statement on Monday. The Liverpool-based group owns the Very and Littlewoods brands.

Zahawi will also work with shareholders on strategic options for the business, which may involve fresh equity investment in the short to medium term, the group added.

The Very Group benefited from a pandemic-era boom in online shopping but swung to a £2mn pre-tax loss in the six months to the end of December, compared with a £2.1mn profit in the same period the previous year due to “tough market conditions”.

It has a complicated financing structure, including more than £1.5bn in securitised loans and bonds of £575mn in different parts of the operating company structure. In February private equity group Carlyle and Abu Dhabi investment group IMI agreed a £125mn funding package for Very Group to “support its growth strategy”.

Carlyle was already a major lender to the group, having repaid close to £300mn of Very’s commitments to Greensill Capital, the supply chain financing group, in 2021. Shares in the retailer have been pledged as collateral for this holding company loan, which gives the private equity group an important role in deciding its future.

The Barclay family — which has lost control of parcel delivery group Yodel this year — has in the past considered a flotation or sale of the Very business. People close to the group said these options would again be explored in the next 12 to 24 months, with the family working with Carlyle and IMI to agree a future structure.

Barclay on Monday lauded Zahawi’s “proven track record in digital growth and innovation” and the fact that he was “highly respected in the UK and global markets”.

Zahawi has been an MP since 2010, and was sacked as Tory chair last year after being found to have committed breaches of the ministerial code by failing to be transparent about his tax affairs.

Prior to his political career, he co-founded and was chief executive of polling platform YouGov. During his tenure, the UK group expanded globally, and joined the London Stock Exchange. The Very Group has previously explored an initial public offering.

Zahawi has also been an unofficial adviser to the Barclay family over the future of its businesses last year, as they faced the prospect of losing control of their media and retail empire.

He helped introduce the family to RedBird IMI, the Abu Dhabi-backed investment fund that went on to agree a deal to acquire the Telegraph in a sale overseen by Lloyds Banking Group. The bank last summer seized control of the newspaper after the family failed to repay their £1.2bn in debts.

Prior to this deal, the Barclay family had also hoped to secure funding from the Middle East to pay down their debts and retain control of the newspaper.

Zahawi was being lined up as chair of the newspaper group if attempts by the Barclay family to refinance their position using Abu Dhabi money proved successful, according to a person familiar with the matter.

The deal agreed with RedBird IMI for the Telegraph was blocked by the government, but it left Abu Dhabi’s IMI as an investor in the Very Group. IMI had agreed to provide £600mn in debt to the group as part of the deal to repay debts to Lloyds.

RedBird IMI said in April it would withdraw its offer for the Telegraph and launch an auction for the newspaper in a bid to recoup its money.



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