LONDON (Reuters) -British clothing group Next 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.
This year it has already purchased the Cath Kidston brand and raised its stake in upmarket fashion chain Reiss to 72%.
Last year, Next bought fashion retailer Joules, furniture brand Made.com, and a minority stake in baby goods retailer JoJo Maman BéBé.
Next said on Friday it will pay FatFace’s current owners, a consortium of financial institutions including Alcentra and Lloyds Banking Group, a combination of cash and new Next shares.
The deal, expected to complete within the next few weeks, will see Next hold 97% of FatFace’s equity, with 3% held by management.
FatFace trades online and from 180 stores in the UK and Ireland, as well as 28 in the United States and Canada.
The company made a pretax profit of 19.5 million pounds in the year to May 2023 on sales of 282 million pounds, up 15% on the year.
Will Crumbie, FatFace’s CEO since 2021, will continue to lead the business, Next said, adding that the deal would not materially impact group profit in its current year.
Last month, Next raised its profit outlook for the third time in four months. Its shares are up 18% so far this year.
($1 = 0.8226 pounds)
(Reporting by James Davey in London and Eva Mathews in Bengaluru; Editing by Shounak Dasgupta, Kylie MacLellan and Jane Merriman)