Lowe holds sway over part of Watson fortune

By Deborah Hill Cone

Friday 27th August 2004

In a startling case of "what goes around comes around," retailer Nick Lowe is back running the company he was paid $1 million by Eric Watson's PRG to leave.

Retail industry watchers were gob-smacked this week to learn Lowe is back in the top job at the appliance retailer now called Noel Leeming Group and recently sold to Australian venture capital company Gresham Private Equity.

What has raised eyebrows is that Lowe left the role in 1999 in acrimonious circumstances after a bitter falling out with the company's then-majority shareholder, Eric Watson.

Special Stock Exchange approval had to be sought to pay Lowe $975,000 to walk away - the sum was to honour his $1.1 million salary for running the company,

Sources said Watson had baulked at paying what was seen as a high salary to Lowe, a veteran of the UK retailing scene, after Watson made a takeover bid for the company, which owned chains Bond & Bond, Noel Leeming and Big Byte.

The irony of his latest move is that Watson will now depend on the man he spurned to maintain the profitability of his Pacific Retail Finance (PRF) operation.

Despite the change in ownership of the retail part of PRG, the two are inextricably linked.

The contract to sell the PRG chains to Gresham included clauses that require the retail operation to use PRF to finance hire purchase agreements.

The profitability of the retail chain has a flow-on effect to the finance venture, which means Lowe now holds a portion of Watson's fortune in the palm of his hand.

Gresham Private Equity managing director Roy McKelvie said Watson's interests now had a supplier role to Noel Leeming Group.

"There's a historic link there but we are confident it will be a close and beneficial supplier customer relationship," McKelvie said.

Lowe takes over from former managing director John Milford, who had handled the sale process.

Companies Office records show this week Lowe was appointed to the board of Noel Leeming Holdings and will sit on the board with McKelvie, another Gresham representative and New Zealand businessman Mark Hutton, who is also a director of Direct Capital.

Following his departure from PRG in 1999, Lowe took the top job at department store chain Farmers.

But he became ensnared in an employment dispute with that company after he quit in February of this year when it changed ownership.

His Farmers dispute was settled out of court, with legal sources saying he got a similar amount to his PRG payout.

Lowe was said to have been involved with a syndicate that tried unsuccessfully to buy the Farmers chain.

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