Thorn

Thorn was a publicly-listed consumer electrical appliance rental business which included Crazy George’s (a consumer goods retailer and financier now rebranded Brighthouse) and Quadriga (a technology provider to the hotel sector).

The Thorn group owned retail stores, consumer leasing assets, hotel media assets and associated contracts. When Terra Firma acquired it in 1998, the business was lacking clear strategic direction and was inefficiently structured. Opportunities were identified to create standalone businesses to improve management focus and ultimately improve the marketability of each business line.

Detailed customer and product profitability analysis transformed sales and pricing strategies in the UK and Scandinavian rental businesses. The businesses were refocused on value rather than earnings growth, resulting in the reduction of expenditure on new rental stock and closure of uneconomic shops, greatly enhancing cash flow generation.

It was identified that, if run for cash rather than low return earnings growth, the Thorn UK and Nordic rental businesses could be securitised to provide capital for operational change and allow any upside from strategic redefinition and operational turnaround to be retained at low cost.

The Thorn investment has been fully realised. The group was refocused around its high value businesses, with strategic disposals of those businesses and regional operations which did not fit this profile. The business was fully exited in 2007.