Next Said Buying FatFace in 100 Million Pound Deal
LONDON — Next plc appears poised to grow its portfolio that already includes Reiss, Cath Kidston and made.com by potentially acquiring FatFace in a 100 million pound deal that could be revealed next week.
Next declined to comment on the potential acquisition, which was first reported by Sky News.
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FatFace is a lifestyle brand spanning across women’s, men’s, kids, footwear and accessories with more than 200 shops worldwide, majority in the U.K.
The lifestyle business was taken over by debt investor Alcentra, Goldman Sachs and Lloyds Bank in mid-2022 in a debt-for-equity swap. Prior to that, FatFace was owned by private equity firm Bridgepoint, which bought the chain in 2007 for 360 million pounds.
When Alcentra, Goldman Sachs and Lloyds Bank took over FatFace, the brand’s debt was reduced to 25.6 million pounds from 146.8 million pounds.
FatFace was founded in 1988 by former policeman Tim Slide and business graduate Jules Leaver. What started out as a project to fund their skiing at French ski resort Méribel turned into a lucrative business where they sold wholesale T-shirts printed with designs relating to the resort.
The success of the brand led to opening a store on London’s Fulham Road.
In 2000, they sold 40 percent of the company to Livingbridge for 5 million pounds. Private equity company Advent International bought Livingbridge’s interest in 2005.
In September, Next revealed that it and the Reiss family have agreed to acquire all of private equity firm Warburg Pincus’ 34 percent interest in the Reiss Group for 128 million pounds.
The transaction, which is expected to take place in mid-October, would see Next‘s holding in the brand go up from 51 to 72 percent.
Meanwhile, the Reiss family’s share will increase to 22 percent, with the remaining 6 percent held by the Reiss management team. Warburg Pincus acquired a majority stake from the Reiss family in May 2016.
Next said the deal would not contribute to the underlying profitability of the group, but there would be a non-recurring, non-cash, exceptional gain in its accounts in the period.
Simon Wolfson, chief executive officer of Next, said the success of Reiss under the new ownership “has been driven by the strength of its brand, first-class management, and the benefits of Total Platform,” which is Next’s suite of online services for third-party sellers.
The group sits on the FTSE 100 and in recent years the brand has become a royal fixture with the likes of Kate Middleton and Meghan Markle. It has also recently become the official travel partner for the McLaren Racing Formula 1 team.
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