Wiese buys 90% stake in UK retailer New Look
AFRICAN investment heavy- weight Brait SE will pay $1.2billion (R14.15-billion) for virtually all of budget clothes retailer New Look, giving it a substantial presence in Britain’s fiercely competitive fashion retail market.
The deal, announced yesterday, puts Brait, whose top shareholder is South African retail mogul Christo Wiese, in the middle of the crowded British high street, where New Look vies with Primark, part of AB Foods, Next and H&M.
New Look is widening its customer base and says menswear will be a major part of the business, as the retailer ramps up overseas expansion after being bought by Wiese.
Brait, Wiese’s private equity vehicle, is acquiring a 90% stake in New Look, which has been majorityowned by private equity houses Apax and Permira for the past 11 years.
The remaining 10% will be owned by the family of Tom Singh, who founded New Look in 1969, and existing management.
New Look was expected to float on the London Stock Exchange this year, but chief executive Anders Kristiansen said Brait offered a better option for the business in the long term.
“We’re focusing on developing a strong brand, and Brait are fully on board with the strategy,” said Kristiansen.
“We’ve produced much stronger women’s ranges and our market share among high street fashion retailers has consistently grown.
“We’re also launching into new areas like active wear, and we plan to make menswear a big part of our business.”
The age of an average New Look customer was 33, the company said, and it had widened its stock ranges to target people on a budget, as well as those willing to spend more than £40 (R745) on an item.
Kristiansen said New Look would continue to focus on growing the business overseas. There are now 27 New Look stores in China, a country where the retailer had no presence 14 months ago.
Kristiansen said yesterday current trading was “good” and that it had worked on having “better transitional ranges” rather than drastically altering stock for each new season. The transaction is expected to be completed at the end of June.
Wiese, who owns South African retail giant Pepkoris, is no stranger to the UK after snapping up fitness chain Virgin Active in a £1.3-billion (R24-billion) deal last month. Virgin Active Health Club has over 1.3 million members around the world.
Brait bought an 80% stake in the chain and its debt, with founder Sir Richard Branson believed to have received around £230-million (R4.28-billion) from reducing his stake from 46% to 20%.
Wiese also holds a stake in British frozen foods retailer Iceland and plans to launch a discount fashion chain called Pep&Co soon, along with former Asda chief executive Andy Bond.
Wiese was also linked with a takeover of BHS earlier this year before Retail Acquisitions Limited snapped up the high street chain for just £1 (R18.60) in March. – The Telegraph