High street stalker with Debenhams on his shopping list

After failing to bag Somerfield, John Lovering targets department store group

Philip Green may be the UK's retail deal maker par excellence but a new name is starting to gain ground in high street circles.

Step forward John Lovering, the man behind the recent bid for Somerfield and the latest name in the frame for Debenhams, the high street department store retailer.

So far, Mr Lovering's portfolio of deals does not bear much comparison to Mr Green's track record, which includes Arcadia, Bhs, Sears, Olympus Sports, a failed tilt at the mighty Marks & Spencer and a continuing interest in the bid battle for Safeway. But it is quite a list all the same.

The 53-year-old Mr Lovering made millions from the £900m sale of the Homebase DIY chain to GUS in November. Before that he had been instrumental in the buy-out of the Birthdays chain of greeting card shops, the buy-out and subsequent flotation of the discount retailer Peacocks and the acquisition of the upmarket tile company Fired Earth. He is currently chairman of Peacocks and Laurel, the private equity-backed pubs group, as well as a non-executive director at Aga Foodservice, which acquired Fired Earth two years ago.

In deal terms, Mr Lovering seems to be stepping up a gear each time. At Homebase he was chairman of the company which turned in a £400m profit for the venture capital backer Permira in less than two years. With the attempt to take over Somerfield for £509m, he secured backing from Morgan Stanley and a side deal with J Sainsbury, though his bid with fellow entrepreneur Bob Mackenzie was rejected.

Now he has been drafted in by CVC and Texas Pacific Group to be a senior non-executive director at Debenhams as the venture capital groups work on a £1.5bn bid approach.

Those who have worked with Mr Lovering say he prefers the low-profile world of private equity to the goldfish bowl of the quoted sector, where he was finance director of Sears and then chief operating officer at Tarmac.

Asked why he swapped quoted companies for private equity in 1995, one retail executive who knows him says: "Because he couldn't make any money. And also, you're in the spotlight in the publicly quoted sector in a way that you're not with private equity. He doesn't like to be in the front line."

At odds with his low profile preference is his decision to employ a personal public relations adviser from a City PR agency. As one retail executive says: "He comes across as someone who doesn't have an ego. But if that's true why does he have his own PR adviser? How many chairman bother to do that?"

What friends and colleagues agree on is that Mr Lovering is a smart cookie who prefers to operate in the retail and consumer goods sectors. One chief executive says of him: "At every meeting I've been in with him, he's been the smartest person in the room. He's a real whizz and the sort of guy who cuts right to the chase."

Another chief executive says: "He's got a lot of retail experience and is very good at analysis. That's his forte, really, the financial analysis of a business."

Others are slightly less charitable. One says of him: "He's a deal-arranger, he's not the new Philip Green or anything. He's done one deal (Homebase.). The rest of it was a bit of a nothing."

Another says of him. "He's a nice guy, perfectly affable. But I haven't detected a great deal of warmth there."

Mr Lovering comes from a comfortable family who sent him to Dulwich College. After studying economics at Exeter University, he did an MBA at Manchester Business School before going into business. Consumer goods was the common thread running through his commercial career. After stints at Spiller and Lex Service Group, he joined Grand Metropolitan as finance director of its retail business. He was then head of financial planning at Imperial Group before pitching up at Sears, the old retail conglomerate, in 1986. At that time Sears owned Selfridges, shoe chains such as Freeman Hardy Willis, True Form and Saxone, as well as the Freemans mail order catalogue. He left Sears to join Tarmac in 1992.

"You do wonder what would have happened to Sears if John had been made chief executive instead of Liam Strong," one retail analyst says. "It might have been better than trying to bring someone in from outside."

Still, it was Sears which gave Mr Lovering his first deal after he moved into private equity. In 1996 he bought Hoogenbosch Beheer, a Dutch shoe and sports goods retailer with 300 stores. He was backed by CinVen and CVC, and sold out at a profit just a year later. "Sears gave it away," one retail observer says.

After that he acquired Fired Earth, the upmarket tile group, with the backing of Prudential Portfolio Managers in 1998, selling out in 2001 to Aga.

At Peacocks, the discount retailer, he has made substantial sums from his involvement in the buy-out in 1997 and the subsequent float. He still owns 2 per cent of the equity, worth £3m.

He is also thought to have made a substantial sum from the sale of Odeon Cinemas to West LB for £431m in February this year.

The Homebase deal was his biggest yet. The business was snapped up in a complicated transaction from Sainsbury's but it was Mr Lovering who was credited with bringing in Rod Templeman as chief executive with Mr Lovering as non-executive chairman. Profits doubled and the business was sold to GUS in double quick time.

Interestingly, he is not identified solely with one venture capital house. CinVen is the nearest there is to a common denominator as it has backed Mr Lovering in Hoogenbosch Beheer, Peacocks and Odeon. But he has also worked with Prudential Ventures, Schroder Ventures (now called Permira) and CVC and Texas Pacific with the Debenhams deal.

Mr Lovering is even more low profile about his life outside work. He lives in Bodiam, Sussex, and has a daughter and two sons, one of whom works at Bridgewell Securities. He lists his other activities as tennis and charity work, especially as a director of Save the Children. "He's got a nice house, but I don't think he's flash," one industry source says.

Having chased Somerfield and now Debenhams since the sale of Homebase at the end of last year, it looks like the retail veteran will not rest until he has bagged another prize.