British clothing group Next (NXT.L) has agreed to buy FatFace in a deal valuing the fashion chain at 115.2 million pounds ($140 million), adding another brand to a fast-growing portfolio.
Next, which operates from about 460 stores in the UK and Ireland and has an online presence in over 70 countries, has been picking up stakes in or acquiring smaller retailers in recent years as it expands its “Total Platform” business.
The high street retailer NEXT will buy over 200 stores for £115.2million from a consortium of financial institutions that took control of the business three years ago.
It is the latest in a flurry of acquisitions by Next after buying brands.
The retailer also runs 460 of its own shops.
Next said it will have 97 per cent ownership of the business after the deal, with Fat Face’s management holding the remaining 3 per cent.
Will Crumbie, chief executive of Fat Face, said:
‘This acquisition by Next today is an important next step in Fat Face’s journey.Fatface will continue to be run by its own management and keep its “creative independence”.
Fatface has 180 UK shops and will retain its base in Hampshire.
It marks the latest High Street buy for Next, which has snapped up Cath Kidston and Joules in the last year.In 2022, it also bought furniture brand Made.com.
Fatface was taken over by a consortium of lenders in 2020 when shops were struggling during the Covid pandemic and Next has sold its clothes online since 2016.
Next has been buying stakes in other retailers such as JoJo Maman Bébé and Reiss to expand its e-commerce business. These firms pay Next to use its online logistics and operations.
Next recognizes that consumers are prioritising higher quality products to achieve better value for money during the cost-of-living crisis, so FatFace’s market positioning should help it achieve this goal,” she said.
Fatface is well-known for its relaxed clothing style.
It is expected that Fatface will continue to run its own stores.
The deal, which is likely to complete in the next few weeks, will see Next pay Fatface’s current owners using a combination of cash and new shares in Next.
FatFace was founded in 1988 and its products range from women’s clothes, men’s, kids’, footwear and accessories.
The business was founded by entrepreneurs Tim Slade and Jules Leaver on a skiing holiday. Needing more money to continue their trip, they sold t-shirts at night from the back of a camper van. FatFace was bought by private equity firm Bridgepoint in 2007 for £360million from Advent International. FatFace’s owners appointed Rothschild to advise on strategic options in May last year, according to reports.
Next has a market value of £8.75billion and has already raised profit forecasts.