The British clothing conglomerate Next has reached an agreement to acquire FatFace in a transaction that values the fashion chain at £115.2 million ($140 million), expanding its rapidly growing portfolio with another brand.
Next, with approximately 460 stores in the UK and Ireland and an online presence in over 70 countries, has been strategically investing in or purchasing smaller retailers in recent years as part of its expansion into the “Total Platform” business.
This year, it has added the Cath Kidston brand to its portfolio and boosted its ownership in the upscale fashion chain Reiss to 72%.
Last year, Next made significant acquisitions, including the fashion retailer Joules, the furniture brand Made.com, and a minority stake in the baby goods retailer JoJo Maman BeBe.
On Friday, Next announced its intention to compensate the current owners of FatFace, a consortium comprising financial institutions like Alcentra and Lloyds Banking Group, with a combination of cash and newly issued Next shares.
The agreement, anticipated to finalize in the coming weeks, will result in Next owning 97% of FatFace’s equity, while the remaining 3% will be retained by the management team.
FatFace conducts its business through online operations and a network of 180 stores in the UK and Ireland, along with 28 additional locations in the United States and Canada.
In the fiscal year ending in May 2023, the company reported a pre-tax profit of £19.5 million, with sales totaling £282 million, marking a 15% increase compared to the previous year.
Next announced that Will Crumbie, who has been serving as FatFace’s CEO since 2021, will remain at the helm of the business. Furthermore, the company mentioned that this agreement is not expected to significantly affect the group’s profit for the current fiscal year.
Last month, Next raised its profit guidance for the third time in four months, resulting in an 18% year-to-date increase in its shares.