DUBAI - The owners of UAE-based budget retailer Brands For Less Group (BFL Group) are considering selling a minority stake in the business to investors, two sources with direct knowledge of the matter said.

BFL Group is working with deNovo Corporate Advisors, the sources said, a Dubai-based boutique led by ex-Morgan Stanley Banker May Nasrallah.

BFL Group did not respond to a Reuters request for comment. deNovo declined to comment on Thursday.

Founded by Lebanese entrepreneurs Toufic Kreidieh and Yasser Beydoun, Brands For Less opened its first store in Beirut in 1996 and four years later expanded the business to the United Arab Emirates and moved its headquarters to Dubai.

The group has several lines including Brands for Less, which consists of retail fashion stores, in addition to Toys For Less, Homes For Less, and Luxury For Less. It follows an off-price retail model, selling branded products at discounted prices.

The planned deal is expected to attract the attention of private equity investors and sovereign wealth funds as the business is expected to do well or outperform in a recessionary environment as people want to save, sources have said.

BFL Group also has an online retail presence and operates 85 stores in six countries, according to information on its website.

The Gulf has been attracting a number of foreign funds to set up a presence in the last two years, lured by a low tax environment, and opportunities to co-invest with sovereign wealth funds in bigger deals in the region.

French private equity firm Ardian said in January it was opening an office in neighbouring Abu Dhabi, capital of the United Arab Emirates, while CVC opened an office in Dubai last year.

The Middle East and North Africa saw 'unprecedented' M&A activity in 2022, EY said in March, with 754 deals, recording a 13% growth in deal volume over 2021.

(Reporting by Hadeel Al Sayegh; Editing by Emelia Sithole-Matarise)