The Daily Telegraph - Saturday
Next buys out private equity stake in fashion chain Reiss
NEXT has joined forces with the family behind the Reiss fashion chain to buy out a US private equity firm’s 34pc stake for £128m.
The retail giant’s holding in Reiss will increase from 51pc to 72pc following the deal, with the family’s share rising to 22pc. Reiss management will hold the remainder.
Lord Wolfson, chief executive at Next, said the decision to increase its investment came after Reiss performed “exceptionally well” after it first took a 25pc stake from Warburg Pincus in March 2021.
Reiss posted a 26pc jump in sales to £325m, latest accounts for the year to February showed.
Following the completion of the deal, Reiss’s results will be consolidated into Next’s accounts. Reiss is expected to still retain its own board of directors and autonomy. It will continue to be headquartered in London, rather than Leicester where Next is based.
It follows a spending spree by Next which has been snapping up ailing retailers in recent months. Next bought both Joules and online furniture store Made.com out of administration late last year.
The retailer also has joint ventures in place with Victoria’s Secret and Gap UK. In April 2022, it was part of a consortium which bought baby clothing retailer JoJo Maman Bébé, taking a 44pc stake in the business.
The latest deal to buy more of Reiss comes after a period of pressure on the retail sector, as shoppers cut back on non-essential items. Next has avoided the worst of the squeeze on spending, and last month upgraded forecasts for a second time in less than two months.
It said it was on track to make £845m in pre-tax profits for the full year to the end of January, £10m more than previously expected. It already raised its full price sales guidance for the year by £137m in mid-June.