John von and Hamid in private equity comeback

Two top retailers have joined newly established private equity fund Merchant Equity Partners as it gears up to go on the acquisition trail.

John von Spreckelsen, who was executive chairman of Somerfield until its£1.1 billion sale to a private consortium at the turn of the year, and former Halfords chief executive David Hamid have become operating partners at the firm founded by Henry Jackson, previously head of Deutsche Bank's European consumer and retail group.

In the past week, HMV and Kesa have both snubbed private equity approaches, prompting industry observers to wonder whether the venture capitalist buying spree in retail is over.

However, Merchant will concentrate on turnaround situations. The founders believe there will be many opportunities and their search for suitable deals will take in Europe as well as the UK.

Von Spreckelsen, who has 35 years' experience of turnarounds and ran Budgens before moving to Somerfield, said: 'I think there are a lot of great opportunities to add value in European retail.'

Hamid, whose CV includes a stint as chief operating officer of Dixons, said: 'Retail will continue to be an exciting area over the next few years, with many potential retail turnaround situations crystallised by recent tough trading conditions.'

Jackson said: 'The addition of two such accomplished figures greatly strengthens our team. Their unrivalled expertise will be of great benefit to us in making successful investments.'

Merchant Equity Partners - originally called Mercapita - was set up by Jackson last month. It is talking to leading European and US banks about the provision of anchor funding.