U.K. Political Chaos Derails Barclay Brothers' Shop Direct Sale

  • Private equity interest waned amid consumer spending worries
  • Barclay brothers said to have asked more than 3 billion pounds

The billionaire Barclay brothers scrapped a plan to sell U.K. online fashion retailer Shop Direct as economic jitters after the country’s inconclusive election outcome cooled interest among potential buyers.

Interest from prospective private equity bidders ebbed after a hung parliament raised questions about the resilience of consumer spending, the company said in a statement Thursday. Twins David and Frederick Barclay, who also own The Daily Telegraph newspaper, were said to be seeking offers in excess of 3 billion pounds ($3.9 billion) for Shop Direct, whose online brands include Littlewoods and Very.

Theresa May’s decision to call a snap election delayed Brexit negotiations and potentially increases the risk of Britain exiting the European Union without having an agreed deal in place, an eventuality that academics have warned would be an economic disaster. That uncertainty is darkening an already gloomy picture for U.K. retailers, who are suffering as consumers rein in spending while sterling’s drop since the Brexit vote drives up costs.

Formed in 2003, Shop Direct’s pretax profit rose 20 percent to 105.6 million pounds in the year ended June 2016.

Hellman & Friedman LLC, BC Partners Ltd and Apax Partners LLP were said to have tabled indicative offers.

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