High street fashion retailer Next has acquired a 25 per cent stake in Reiss and could take control of the upmarket UK fashion chain by mid-next year.
The FTSE 100 group will make a £33m equity investment, acquiring shares from majority investor Warburg Pincus and the group’s founding Reiss family in proportion to their existing holdings.
It will also lend the fashion retailer £10m. Warburg Pincus said the transaction implied an enterprise value for Reiss of roughly £200m. The company has net debt of about £60m.
Next also has an option to acquire an additional 26 per cent at a slightly higher price at any time before July 2022, taking its stake to 51 per cent and allowing it to consolidate Reiss’s sales and profits.
Following the acquisition, Reiss’s online operations will migrate to Next’s Total Platform unit, an Ocado-like technology service that allows brands to use Next’s formidable IT, warehousing and distribution infrastructure for their own ecommerce operations.
