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Commentary: Speculation that ScS is to be sold or floated emerged at the weekend with a Sunday newspaper story that had all the hallmarks of a finance house leaking its intention to drum up interest and establish an asking price.


A couple of years back I asked David Knight — the CEO at ScS — whether there were any plans for its private equity owner to exit the business.

Understandably, he flat-batted the question — though two years on and six years since it picked ScS up off the floor — it would make sense if Sun European were considering selling the retailer.


The reality, of course, is that with any business owned by banks or private equity companies, it perpetually has the For Sale board hoisted outside its doors.


ScS has done a good job of rebuilding following its problems in 2008, growing sales from £163m back in 2009 to nearly £246m in 2013–14 without betting the farm on store space growth.


Profits have been on an upward trajectory too in the past three years, reversing consolidated pre-tax losses in 2012 and 2013 to make £4.2m last year.


It has refurbished its stores and entered into the floorcoverings segment — pitching itself as a Sofa Carpet Specialist — while it has added a branded offer to its product mix, with La-Z-Boy and G-Plan among the marques on the shop floor.


It has also brokered a deal to run the For Living concession within House of Fraser department stores, which could have a transformational effect on the business’ top line.


Six–seven years is a common ownership cycle for investment firms, which further lends weight to the suggestion that now is the time for Sun to begin to crystallise its exit plan.


Unlike some of its rivals, ScS was picked up for little money — having gone through insolvency in 2008 — which means the potential upside for Sun is hefty, both in terms of potential returns but also in not having to target an unrealistic valuation.


Now is the perfect time for Sun to look to realise its investment.